Influx of Late-Model, Low-Mileage Vehicles Pushes Up Prices of Used Trucks in October

This story appears in the Dec. 9 print edition of Transport Topics.

Used-truck prices have risen in recent months as more late-model, low-mileage equipment has reached the market, according to industry analysts.

The average price of a used truck sold in October climbed to $42,100, up 11% from a year earlier, to mark the third straight year-over-year gain, according to ACT Research.

October’s average price also was up 7% from September.

November figures are not yet available.

ACT Vice President Steve Tam said the rise in pricing reflects greater availability of “more desirable used trucks with more economic life left in them.”

He added, “That’s the corollary to the increased sales we’re seeing on the new Class 8 side.”

Trucking companies generally are not ex-panding their fleets, so the growth in new equipment sales has led to more trade-ins, Tam said. “We’re starting to see a little bit newer stuff in the marketplace on the used-truck side as a result of that.”

New U.S. Class 8 sales volumes climbed 15.6% in October and 11.3% in September, ending 12 straight year-over-year declines, according to data from Ward’s.

Meanwhile, retail prices for used Class 8 sleepers are holding at near record levels, according to American Truck Dealers.

The average retail price of a used sleeper cab sold in October was $53,365, up from $49,366 in the same month last year but down from the all-time high of $54,090 recorded in August, ATD analyst Chris Visser said.

“Anything that’s under 600,000 miles is bringing record prices,” he said.

The high purchase price for new trucks continues to push some buyers toward late-model used equipment, Visser added.

Registrations of used trucks have increased this year, according to the quarterly Polk Commercial Vehicle report from IHS Automotive.

Polk identified 527,494 registrations of used Class 3-8 trucks in the first nine months of 2013, up 7.8% from the same timeframe last year. New registrations, meanwhile, were up only 2.8%, the report said.

Looking specifically at Class 8, used registrations have increased 7.6% year-to-date, and new registrations have dropped 7.2%.

Clean, used Class 8 trucks “continue to hold a real premium in the marketplace,” said Gary Meteer, director of aftermarket and commercial vehicle solutions at Polk.

“These older models are costing people money to operate, so if they can get a good, clean used truck at the right price, they’re snapping them up,” Meteer said.

ACT’s Tam said the pricing increase also mirrors a decline in average mileage.

“We don’t have as many older trucks sitting on lots as we used to, and that has the net effect of lifting prices,” he said.

The average used truck sold in October had about 543,000 miles, down from 570,000 a year earlier, according to ACT’s figures. Average age was 85 months — a little over seven years — down from 87 months in September and flat compared with October 2012.

The dealers that ACT tracks sold 2,428 used trucks in October, down 15% year-over-year.

However, volumes increased 9% from the previous month, according to ACT’s survey, which includes retail, wholesale and auction sales and represents roughly 10% of the entire market.

Tam said sales continue to be limited by the availability of inventory rather than a decline in demand.

A downturn in dealer-to-dealer sales also may have contributed to the sales decline, he added.

ATD’s Visser said the average mileage for a used sleeper sold in October was 523,109, down from 551,773 a year ago and 537,968 in September, he said.

“Mileage is actually coming down fairly notably, and I think that’s because there are more later-model trucks entering the market, particularly the 2011 model year,” Visser said. “The increased availability of these latest-model years is pushing down the average mileage of trucks sold, just like it’s pushing up the average price.”

Scott Williamson, sales manager at Fyda Freightliner in Youngstown, Ohio, said although used-truck sales have been “sluggish” for most of the year, his dealership saw an uptick in October and November.

It’s been “very hard to get your hands” on late-model equipment with very low mileage, he said. “I see that changing here in the near future because there are so many companies buying new trucks now that we’re going to start to see more and more of those trades.”

“I don’t think the pricing is going to fall too much on them,” he added. “I think there’s enough demand that they’ll be gobbled up pretty quickly, but there will be a little bit more to go around.”

But Williamson said there is a gap in demand, with some customers moving toward vehicles with pre-2007 emissions engines and others looking for later-model, lower-mileage trucks instead, but 2008-2010 models can be “tough to sell.”