Used Truck Sales in December Drop 7% From Prior Year
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Used Class 8 truck sales in December declined by 7.1% from the same period the prior year, ACT Research reported.
Sales for the month fell year-over-year to 19,500 units from 21,000, and also experienced a sequential decline of 4.9% from 20,500 units in November. The average retail sale price fell 27.6% to $57,975 from $80,071 during the year-ago period, and 2.6% from $59,533 the prior month. Average mileage for used trucks decreased 4.4% to 408,000 from 427,000 a year prior, and 1.9% from 416,000 in November.
Steve Tam, vice president at ACT, said the company expects moderate growth in the months ahead for the cost of a used truck. “Our pricing expectations remain steady, with a return to [month-to-month] growth toward the end of 2024 as the most likely course,” he said.
Tam noted total sales rose 40% for the full year when compared to 2022, led by a 78% surge in auction activity. The wholesale market also expanded by 75%. Growth in the retail market was more reserved at 12%, Tam noted.
Golden
“December was pretty decent, actually,” said Trey Golden, vice president of used truck sales at Texas-based dealership chain Rush Enterprises. “A lot of times people dump a lot [of equipment] in December and try to get a lot of stuff off of their books, and we didn’t see that. When we’re talking about December, that was good for us. It kept pricing pretty stable from what it had been and we had a good month. I know that there’s still a lot of inventory out there.”
Golden expects the measured pace of December to carry over into the early months of 2024.
“It just feels like there weren’t a lot of people that had a lot of incentive to say, ‘This stuff has all got to go away by the end of the year,’ ” Golden said. “I think it’s being worked through in a pretty orderly fashion right now.”
Golden also noted that the recovering new-truck market is having an effect on used trucks, since manufacturers have worked through many of the supply chain issues that stymied them previously. This means buyers who had no choice but to shop used trucks now have a better chance of getting a new one.
Bowles
“I’m not saying that an individual supplier doesn’t have a part shortage here or there,” Golden said, “but for the most part I would say they are caught up — at least to what we would call normal backlogs. So that does play a big part, especially [with] that late-model low-mileage truck — the 1- to 3-year-old used truck with low miles — because that’s a truck that was being bought up for the last couple years by a ‘new truck’ buyer.”
That’s reflected in softer shopping activity for Commercial Truck Trader, an online marketplace for new and used commercial vehicles. Charles Bowles, the site’s director of strategic initiatives, said data indicates dealer lots are now grappling with increasing inventory. Specifically, he said the website saw a 31% surge in used listings for all vehicle classes compared with the same period last year. However, it also noted a drop in buyer interest that tracked with ACT’s reported drop in retail prices.
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“This [price] drop was accompanied by a significant 13.4% decrease in buyer interest, measured by the number of Vehicle Detail Page views on Commercial Truck Trader,” he said. “Dealers, while observing growth in unit sales volume, are adapting by catering to lower price points, indicating the impact of reduced demand.”
Improvement in the business climate is needed before buyers feel more confident about a purchase, Bowles added.
“Spot freight rates are gradually increasing, but remain below the ideal levels for many smaller freight companies,” he said. “Long-term improvements in freight rates are anticipated to boost used truck demand and contribute to stabilizing retail prices. However, the persistent challenge lies in the high cost of money, with interest rates continuing to be a significant barrier for potential buyers.”
