Late-Model Equipment Lifts Used-Truck Prices
Used-truck pricing has remained at historically high levels, supported by an ongoing market shift toward more valuable late-model equipment, industry analysts said.
The average price of a used Class 8 truck sold in May rose to a record $49,930, up from $49,821 in April and $49,034 a year earlier, ACT Research reported.
The continued high values reflect the composition of the equipment sold, with some buyers moving toward newer used trucks, ACT Vice President Steve Tam said.
A key segment of the used market has long focused on trucks that predate the 2007 federal emissions standards, but their increasing scarcity is forcing some buyers to look at more recent models, he added.
“We’ve gotten to the point where there are just very few of those units left,” Tam said. “And with ’08, ’09 and ’10 being such weak years for new truck sales, attention is now shifting to the 2012 trucks and beyond.”
Neal McAtee, co-owner of McAtee Truck Sales Inc. in Oklahoma City, said there still is high demand for the 2007 and older trucks and the prices for those models continue to hold strong, but they are becoming rarer.
“They are definitely getting harder to find,” he said. “The need is still there, but the quantity is not there.”
As the availability of 2007 models dwindles, the buyers interested in those trucks may skip over the next few model years and go straight to trucks with selective catalytic reduction, introduced in 2010, he added.
Although used-truck values have continued to climb, that upward trend may be starting to soften. Used-truck pricing increased 14% in 2014 but rose at a slower rate of 8% in the first five months of this year, ACT’s Tam said.
Day cabs and vocational trucks still are in very high demand, but the market now is “somewhat oversupplied” with aerodynamic sleeper tractors, he said.
In fact, American Truck Dealers reported that the average retail price for a used Class 8 sleeper was $59,092 in May. That’s down from $63,325 in April, which was an all-time high, but up from $58,917 on a year-over-year basis.
“There has been an increased supply of used tractors, but it hasn’t been a glut. It’s just been a steady increase,” ATD analyst Chris Visser said.
Nevertheless, demand remains strong because the average 3- to 5-year-old sleeper tractor still is about half the price of a new truck, if not less, he said.
“That’s going to be the case going forward because the price of new trucks is going to continue to increase,” Visser said.
The federal government’s proposed Phase 2 greenhouse-gas standards, which would require manufacturers to incrementally reduce carbon emissions through 2027, is expected to increase the price of new trucks while improving fuel economy by as much as 24% for tractors.
Visser said the rising cost of new equipment already has contributed to higher demand for used trucks.
ACT’s Tam said the move toward younger equipment in the used market has contributed to a decline in average mileage, which stood at 519,000 in May, down from 534,000 a year earlier.
For retail sleepers, average mileage in May was 510,810, compared with 506,880 in May 2014, ATD said.
The used-truck sellers tracked by ACT sold 2,496 vehicles in May, down from 2,806 in April but up slightly from 2,430 in May 2014. ACT’s sample represents about 10% of the entire used market.
