Used Class 8 Sales Rise 4.65% in August
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Used Class 8 truck sales rose 4.65% in August to 22,500 from 21,500, the first year-over-year increase since November, according to the latest data from ACT Research.
The average retail sales price for Class 8 trucks sold in August was $64,687, down 0.47% from $64,993 in July and 25.6% from $86,987 in August 2022.
August sales jumped 14% compared with July’s 19,500 total, the preliminary data show. July used Class 8 sales fell 9.3% year-on-year to 19,500 vehicles from 21,500, according to ACT.
“Historically, August is the second-best sales month of the year, more than 8% above average and 10% better than July,” ACT Vice President Steve Tam said. “The uncharacteristically large improvement this month is likely a reflection of the increased availability of units at more attractive prices.
ACT Research Vice President Steve Tam. (ACT Research)
“In three of the past four months, used Class 8 average retail sale prices have reflected either below normal or typical levels of month-to-month depreciation.”
“The used truck market is falling into more of a traditional pattern ... after a really weird couple of years,” Rush Enterprises Vice President of Used Truck Sales Trey Golden told Transport Topics, adding that he expects normal seasonal sales through the end of 2023.
Depreciation has returned to more normal levels of 3% to 4% a month, although the market prefers depreciation of 1.5% to 2% a month, Golden said.
Average retail mileage for Class 8 trucks sold in August was 421,000, compared with 426,000 in July and 440,000 in August 2022, according to ACT.
New truck sales have been very good because there are a lot of high-mileage trucks in the marketplace, Golden said, adding that there have been a lot fewer trade-ins so far in 2023, with carriers selling the trucks themselves.
Average retail mileage for Class 8 trucks sold in August was 421,000, compared with 426,000 in July and 440,000 in August 2022, according to ACT.
Visser
The average used sleeper tractor sold in August was 71 months old, had 448,552 miles and brought in $64,566, according to J.D. Power Senior Analyst and Product Manager Chris Visser.
On a year-on-year basis, Visser said in a blog Sept. 20, this average sleeper was three months older, had 6,097 (1.4%) more miles and cost $43,925 (59.5%) less. When viewed sequentially, the average sleeper was three months newer than in July, had 16,009 (3.4%) more miles and brought in $2,074 (3.1%) less money.
More low-spec, high-mileage sleeper tractors are moving through retail outlets, frequently as package deals, said Visser, the architect of J.D. Power’s commercial vehicle valuation and market intelligence processes, adding that this also was the case when it came to auction sales.
Sleeper sales prices in the first eight months of 2023 averaged 31.2% lower than in the same period of 2022, Visser said. Late-model sleepers are now about at parity with the last strong pre-pandemic period of 2018 in nominal dollars, or about 20% less when adjusted for inflation, he added.
Monthly depreciation this year is averaging 3.8%, Visser said in the blog.
For Comparison’s Sake
Sales prices by model year for sleeper trucks generally were lower than in July, although there was one outlier:
- Model year 2022: $124,534 — $7,312 (5.5%) lower than in July
- Model year 2021: $87,971 — $6,621 (7.0%) less than July
- Model year 2020: $72,606 — $6,432 (8.1%) below July
- Model year 2019: $57,700 — $3,277 (5.4%) lower than in July
- Model year 2018: $47,922 — $533 (1.1%) higher than July
Source: J.D. Power
At the FTR Transportation Conference 2023 on Sept. 12, Visser told attendees overall used Class 8 truck depreciation in August saw a return to a relatively steep decline. This came after the second quarter saw a bit of a flattening out in post-pandemic used truck market depreciation, he said.
“The market took a breather [in the second quarter],” Visser said. “It could be that values got low enough where supply and demand were in equilibrium to an extent where buyers saw enough value in this lower pricing … and jumped back in to an extent and purchased some trucks.”
Looking forward, Tam said: “With destocking on shippers’ inventory at hand, freight is expected to stop contracting and perhaps even return to growth soon. At the same time, the number of trucks servicing the freight market continues to decline. These are the exact ingredients for a rebalancing of capacity and the subsequent return to a more normal used truck market.”
Mark Wiklin, the used truck director for Knoxville, Tenn.-based heavy truck dealership Worldwide Equipment Enterprises, said he was “fairly positive about the outlook for the rest of 2023; we’re still seeing many buyers entering the market after sitting on the sidelines while prices were higher.”
Used equipment marketplace specialist Sandhills Global is not so sure, noting Sept. 7 that “inventory level increases paused in August for used heavy-duty trucks. However, an upward trend remains and is expected to continue.”
A bankruptcy court on Sept. 15 laid out the timeline for the sale of shuttered less-than-truckload carrier Yellow Corp.’s trucks, trailers and terminals. The bid deadline for Yellow’s trucks and trailers is Oct. 13.
Yellow owned about 12,700 tractors and 42,000 trailers at the end of the second quarter. The vehicles will be auctioned off Oct. 18, if an auction is needed. Winning bidders are scheduled to be unveiled Oct. 23. Around 2,000 of the tractors were bought in 2020 with $400 million of a $700 million loan provided by the Department of the Treasury.
Golden said that before the Yellow trucks hit the market, they will have to be reconditioned, with many requiring work. As a result, Golden expects those trucks to enter the market in the first quarter of 2024. If a large fleet buys a healthy percentage of the rolling stock on offer, Golden said that would be good for the used Class 8 market.
“It will depend on how the trucks enter the market,” Wiklin added, whether as a trickle or a huge dump of inventory. “We’re still seeing plenty of buyers if its at the right price.”
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