Average Used Class 8 Price in March Is Third-Highest Ever
[Stay on top of transportation news: Get TTNews in your inbox.]
The average used Class 8 truck in March brought the third-highest price ever as demand rages on and supply is very tight, ACT Research reported.
That price hit $52,388 compared with $43,791 a year earlier. It jumped up from $49,563 in February, according to ACT. Pricing climbed as the order backlog for new trucks reaches into next year while freight demand and rates remain exceptionally high.
“We are expecting sequential prices and year-over-year increases as the year progresses,” ACT Vice President Steve Tam told Transport Topics. “We will be having the opportunity to reach the all-time high in this cycle at the rate that we are going.”
According to the latest release of the State of the Industry: U.S. Classes 3-8 #UsedTrucks, published by ACT Research, used #Class8 volumes (same dealer sales) grew for all time periods, up 28% sequentially, 25% higher y/y, and 13% more on a ytd basis.https://t.co/kypLKbD7eG pic.twitter.com/xpuFR5l6OE — ACT Research (@actresearch) April 28, 2021
He said that the all-time high for used Class 8 trucks occurred during 2015 when the average price hit $55,000. The next highest, almost $53,000, came in late 2018.
“As you may well imagine, selling prices are wildly variable, depending on age, miles, condition, spec, etc.,” Tam said. “This month, the average sale price of a 3-year-old truck was over $90,000 whereas 8-year-old trucks are going for more than $20,000. In both cases, that’s 35-40% more than four or five months ago.”
Tam said wholesalers and dealers are seeing prices climb, too.
“They have realized — if prices are going to be this high and they want to sell trucks — they have no choice but to pay the price to get them, then turn around and put a commensurate increase on the price tag so they make the margin they are accustomed to making,” he said.
Each month, ACT surveys a sample of dealers, wholesalers and auctioneers as well as a few large fleets to determine average price, age and mileage, and estimated industry volumes.
“From a margin perspective, in the first quarter, that was the largest — the highest used truck margin that I can ever remember that we’ve had,” Rush Enterprises Inc. Chairman and CEO W.M. “Rusty” Rush said during the company’s latest quarterly earnings call. He added that in April used truck prices were up about 35% from last April, and he expected margins will remain high.
Rush’s used truck sales reached 1,924 units in the first quarter, up 23.5% compared with 1,558 a year earlier. The publicly traded dealership network has more than 100 locations in 22 states.
ACT reported used Class 8 sales reached 23,800 in March, compared with 18,000 a year ago.
Sales of new trucks also have been strong.
“We had a pretty decent sales month on the new truck side,” Tam said, “in March and even in February. So there is a flow of trucks, but not enough to meet the demand that is out there.”
According to WardsAuto.com, 22,031 new trucks sold in March, along with 15,369 in February.
On the used inventory, Tam said most of what is available are older trucks with higher miles that are not the most desirable units.
Even at Level 4 autonomy, self-driving trucks will have technical limitations. In this episode, we ask how technology developers are clearing those hurdles to make autonomous trucking a reality. We bring in Boris Sofman, head of engineering for the autonomous trucking program at Waymo. Hear a snippet above, and get the full program by going to RoadSigns.TTNews.com.
The mileage on the average Class 8 was 426,000, down from 436,000 a year earlier. The age of that truck was 6 years, five months — flat with a year ago.
Paccar Inc. is “leveraging investments in its 12 worldwide used truck centers to sell an increased number of used trucks at higher retail prices,” said Ken Roemer, president of PacLease.
He added the semiconductor undersupply issue “has a silver lining by increasing the demand for readily available used trucks.”
Fleet Advantage, a truck leasing firm serving private fleets with a focus on business analytics and cost management, posted record used truck sales in the first quarter, said Ludmila Manin, a remarketing sales associate.
“Fleet Advantage continues to be very active in the sale of off-lease used trucks,” she said. “The company sold over 495 trucks with revenue exceeding $11 million in the first quarter of 2021, outpacing last year’s record-breaking sales.”
She noted Fleet Advantage can accurately predict its incoming inventory up to nine months out.
That, coupled with what she called the company’s improved off-lease inspection and surrender process, makes Fleet Advantage a “virtual used truck factory and our customers love this.”
Meanwhile, “Auction pricing for the newest available sleeper tractors continues to shoot into the stratosphere,” Chris Visser, commercial truck senior analyst at J.D. Power Valuation Services, wrote in a recent blog.
“There are just not enough of these trucks to meet demand,” Visser said. “Small sample sizes mean we’re not going to draw conclusions on one month’s results, but volume was actually higher in March than February, so the trend looks legitimate.”
Also, his benchmark group of 4- to 6-year-old trucks, together, brought 21.9% more money month-over-month.
He tracked model year 2018 trucks that brought $69,556 on average. That was $19,627, or 39.3%, higher than February.
“We don’t expect another 39.3% increase in any month-over-month results,” Visser said, “but we do expect the newest trucks in the marketplace to remain a sure bet [for sales] into the summer.”
Want more news? Listen to today's daily briefing below or go here for more info:
