Used Sleeper Prices Decline Slightly From Record High, Dealers Report
This story appears in the April 27 print edition of Transport Topics.
Used-truck values slipped last month but remained near record highs, even as fleet trade-ins continued to augment the available supply of used equipment, analysts said.
The average retail price for a used Class 8 sleeper tractor sold in March was $60,730, a slight decline from $61,719 in February but still well above the $55,721 average recorded in March 2014, American Truck Dealers reported.
The February figure stands as the highest level on record after the average price in January was revised downward to $60,784.
ATD analyst Chris Visser said the high average pricing in recent months reflects an influx of newer, lower-mileage trucks that are commanding strong values on the secondary market.
“There will be an increased supply, but demand is still very strong, so dealers will have more equipment to sell at pricing that is just off record levels,” he said.
The availability of low-mileage used trucks remains limited, but the supply has improved to some extent due to the consistent growth of new equipment sales and the trade-ins of used trucks that typically accompany them, Visser said.
“The sky-high [new truck] orders of the fourth quarter and early first quarter seem to be for deliveries that are spread throughout this year, so we’ll see a nice, steady level of sales through at least the first three quarters of 2015, and that’ll result in a continued high volume of trade-ins,” he said.
New Class 8 sales in the United States are up 25% year to date, putting 2015 on pace to be the industry’s best year for new equipment since 2006, according to data from WardsAuto.com.
“Business is doing very well — if you can find trucks,” said Rick Clark, president of the Used Truck Association.
The growth of new-truck sales and trade packages eventually will help boost the industry’s supply of used trucks, but for now, inventories remain tight, he said.
As a result, Clark predicted that used-truck prices will remain high during the next few months.
With the used market as hot as it is, many fleets are selling their older trucks themselves rather than trading them, said Clark, who is also vice president at Cranford,
New Jersey-based National Truck Protection, an independent provider of warranties and service contracts to the North American trucking industry.
Results from ACT Research’s March used-truck pricing data were not available by press time, but Vice President Steve Tam said he expected prices to decline sequentially from near-record territory in February.
The firm reported that average pricing in February stood at $49,205 for all types of used Class 8 trucks sold retail, wholesale and via auction. That price compared with $44,879 in February 2014 and was just shy of the all-time peak of $49,803 in October, ACT said.
Used-truck sales volumes rose to 2,404 in February, it said, up from 2,370 a year earlier. ACT’s data represent about 8% to 10% of the market.
“We’ll continue to see relative softening compared to those record numbers, but we’re going to stay at pretty high numbers through this year and probably through most of next year,” Tam said.
He agreed that the availability of used trucks remains a challenge.
“So far, we’re not hearing unanimous agreement that the inventory situation has improved, but we are hearing an increasing number of dealers telling us it’s becoming less of a constraint,” Tam said.
Although new truck transactions are strong, trucking companies aren’t always trading the same number of vehicles that they are purchasing because, in some cases, they are expanding their fleets, he said.
Forrest Dodson, sales manager at J&J Truck Sales in Chatham, Virginia, said used-truck buyers seem to have plenty of work to do right now, so they’re looking to upgrade their equipment.
In some cases, buyers who are frustrated with the higher prices of new trucks have turned to used trucks instead, Dodson said.
At the same time, though, it’s still a challenge to find good used trucks to sell.
“You’re not going to just go out there and gobble up a bunch of them,” Dodson said. “You really have to go out and hunt pretty hard for them.”
