Prices for Used Class 8 Trucks Begin to Ease as Dealers See Higher Trade-in Volumes
This story appears in the Feb. 16 print edition of Transport Topics.
Prices for used Class 8 trucks have eased in recent months as more equipment has reached the secondary market, but values remain near historic levels, analysts reported.
The average retail price for a used Class 8 sleeper tractor sold in December was $56,866, down 5% from $59,759 in November but up 5% from $54,196 in December 2013, according to the American Truck Dealers.
Sequentially, the average had declined for two straight months after peaking at $61,084 in October.
ATD analyst Chris Visser said equipment values are depreciating mildly due to the increased supply, which has been driven by higher trade-in volumes as new-truck sales rise.
“Selling prices are still extremely strong, historically,” he said. “We’ve basically gone from lower-mileage trucks being almost nonexistent to being somewhat available.”
For all of 2014, though, the average used-sleeper prices were $58,565, up 12% from $52,339 in 2013.
“The demand for lower-mileage trucks is not going to decrease. It’s going to remain strong or get even stronger,” Visser said. “And with more trucks to sell now, I think we’ll see the volume of used-trucks sales increasing.”
ACT Research reported that the average price for all types of used Class 8 trucks — sold via retail, wholesale and auction channels — was $47,040 in December, the lowest level since March and down from $48,399 in November. However, it still was well above the $43,998 average a year earlier.
The firm’s highest monthly average on record was $50,050 in October.
ACT Vice President Steve Tam also said that desirable used equipment remains scarce despite the lower sales prices at the end of the year.
“The supply has been the real constraining issue,” he said. “The fact that we’ve had high demand has only exacerbated the situation.”
ACT said sales prices averaged $46,841 in 2014, up 17% from $40,118 in 2013. ACT forecasts that used-truck prices will increase by 5% to 10% this year, he said.
Tam predicted that the supply shortage will continue into 2016. He said some companies are not necessarily trading in a truck for each new purchase, instead choosing to expand their fleets.
Sales volumes at the used-truck sellers tracked by ACT stood at 2,078 in December, up from 1,932 in November but down from 2,376 a year earlier.
Full-year sales stood at 26,813, down from 28,353 in 2013.
However, Tam said that decline may reflect an increase in direct sales by the fleets due to the high value of their used equipment, a trend that may not be fully represented in ACT’s data. The firm’s sample represents about 8-10% of the total market.
Truck and engine maker Navistar Inc. said it has accumulated a larger-than-usual inventory of used trucks and described its plans to sell those units during its Feb. 4 analyst day at its Lisle, Illinois, headquarters.
Bill Kozek, president of Navistar’s truck and parts business, said the company has been taking back more of its International trucks with MaxxForce exhaust gas recirculation engines on trade for the past two years while making a push to get the company’s new trucks with selective catalytic reduction technology into the market.
He said Navistar has “aggressive plans” in place to sell its stockpile of used trucks, including its Diamond Renewed reconditioning program, which is designed in part to fix EGR-system problems associated with those vehicles.
Kozek said the average age for the company’s used inventory is about three to four years, compared with five to six years for the typical used-truck cycle.
“Our Diamond Renewed program will allow our late-model, low-mileage vehicles to perform better than any vehicle in the used-truck marketplace,” he said.
Truck-leasing provider Ryder System Inc., a major seller of used trucks, recently expanded its online used-vehicle catalogue to include “as-is” condition vehicles, cab and chassis and high-horsepower trucks.
“We are showing our customers the broad spectrum of what we have so they can find what they want,” said Eugene Tangney, Ryder’s vice president of asset management and vehicle sales.
He said Ryder sells vehicles that are at the end of their leasing life or rental life, typically 5 to 7 years old depending on mileage and application.
Tangney said many of Ryder’s used-truck customers prefer units that predate the 2007 federal emissions standards, but there are only so many of those models to go around.
“They are getting scarce,” he said. “We’re coming to the end of the line for them.”
He also said Ryder, whose Supply Chain Solutions unit ranks No. 11 on the Transport Topics Top 100 list of U.S. and Canadian for-hire carriers, has seen an uptick in the number of people looking to enter the market as owner-operators.
Ryder said it has the largest inventory of pre-owned vehicles for sale in North America and sells more than 17,000 commercial trucks, trailers and vans per year.
