Average Used Class 8 Price Drops 6.9% in September
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The price of the average used Class 8 truck sold in September dropped below year-ago levels for the second consecutive month as sales fell, too, ACT Research reported.
Prices decreased 6.9%, to $43,808 compared with $47,060 a year earlier, according to ACT, which surveyed a sample of dealers, wholesalers and auctioneers as well as a few large fleets to determine the average price, age and mileage, and volumes.
Preliminary used Class 8 volumes (same dealer sales) fell 5% month-over-month in September. #UsedTrucks, #Trucking #semitruck #transportation #truck #trucking
Read more: https://t.co/k7jSRkOzCI pic.twitter.com/Upy20aTh79— ACT Research (@actresearch) October 21, 2019
In August, prices dropped below year-earlier levels for the first time in 20 months.
Rates are softening, and so is profitability as the freight market contracts — cutting away at the incentive to buy a used truck today, experts said.
“We have seen the year-over-year comparable [for prices] softening as the year has progressed,” ACT Vice President Steve Tam said. “We are finally up against some of those really strong numbers from last year and are seeing a deterioration in the current market. So we are ending up very much where we thought we would be — albeit not as quickly.”
Sales fell to an estimated 20,500 compared with 21,900 in the 2018 period.
Year to date, sales dropped 14.3%, to 187,500 compared with 219,000 a year earlier.
The general condition and the age of the average Class 8 supported the decline in price, Tam added.
The age rose to 6 years, 11 months. A year before, it was 6 years, 8 months.
Mileage climbed to 463,000 compared with 439,000 a year earlier.
One truck maker CEO said Class 8 prices for its used trucks, along with the rest of the industry, are down year-over-year and likely to stay there for several months.
Feight
Paccar Inc. CEO Preston Feight said his used truck prices are down 10% to 15%, but demand for day cabs remains strong. Kenworth Truck Co. and Peterbilt Motors Co. are Paccar’s brands in North America.
Feight said his trucks bring a premium over the competition, and Paccar has taken additional steps to market them through a new used-truck center in Los Angeles, and one in Denton, Texas, (where Peterbilt is based) scheduled to open in the fourth quarter.
Looking ahead, he added: “I think that down amount that we’ve seen, maybe it’ll continue. It’s obviously difficult to forecast entirely where it’ll stay settled out to, but it could stay down for the next couple of quarters.”
Meanwhile, two large commercial-vehicle leasing companies are offering significant discounts online to move retail inventory.
Penske, through Oct. 31, offered online savings up to $10,000 on select used day cab and sleeper tractors.
Penske sells a variety of used heavy-duty tractors, day cabs, straight trucks and yard trucks made by manufacturers including International, Freightliner and Volvo.
Penske, for example, posted a discounted 2013 Volvo VNL64 T300 day cab with 58,431 miles for $43,000, down from $50,500.
Penske also is offering discounts of up to $15,000 on alternative fuel trucks, such as a 2014 Freightliner Cascadia fueled by compressed natural gas with 412,131 miles for sale for $40,250, down from $55,250.
Expanding your fleet? #Penske can locate the #usedtrucks to meet your needs. https://t.co/Vg3iEdAitz — Penske Used Trucks (@PenskeUsedTruck) October 23, 2019
Ryder has reduced tractors up to $7,000 online. And a used tractor can be had for as little as $11,995, which is the price for a 2013 Freightliner Cascadia 125 with 728,114 miles.
At the same time, Rush Enterprises, a truck dealership with 100 locations in 22 states, reported it sold 1,868 used vehicles in the third quarter, a 15% decrease compared with a year earlier.
“Near record-high deliveries of new trucks over the past few years have caused an oversupply of used trucks in the market,” said W.M. “Rusty” Rush, chairman and CEO of Rush Enterprises Inc. “Currently, we believe that used truck values are depreciating faster than what is considered a normal rate.”
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