Used Sales Dip on Economic Concerns, Limited Low-Mileage Models, ACT Says

This story appears in the March. 11 print edition of Transport Topics.

Sales of used Class 8 vehicles slipped 3.1% in January from the same month last year as limited inventories and economic concerns put a damper on purchases, ACT Research reported.

Dealers, wholesalers and auctioneers surveyed by ACT sold 1,696 used trucks in January, compared with 1,751 a year earlier. ACT’s survey represents about 8% to 10% of the entire market of used Class 8 vehicles.

“We’re just kind of going sideways, but at a generally lower level,” ACT Vice President Steve Tam said.

Tam said that the small fleets that typically buy used equipment are hearing the message that economic growth is going to be “anemic” in the months ahead, so they are putting off investing in equipment.

“If I know I’ve got a mediocre year on tap, maybe I’m just going to muddle through,” he said, “or only replace my absolute oldest trucks — the ones that I’ve got to replace — versus replacing my normal cycle or maybe even some extras.”

The average price of a used truck sold in January fell to $38,533, Tam said, down 13% from a year earlier.

On a month-to-month basis, used-truck sales declined 6.2% from December and pricing decreased 6.5%, ACT said.

Tam said lower sales are also tied to a dearth of desirable used trucks on the market.

If dealers had more of “the good stuff,” they could sell it, he said. “They can’t get their hands on it. It’s a market that has the potential to head the other direction, but there’s nothing to facilitate that.”

Not only is there a scarcity of low-mileage units, but the market also doesn’t have enough day cabs to meet demand, Tam said.

“It’s the aerodynamic sleeper that inventory is awash in. That’s the truck that right now has probably the softest demand.”

American Truck Dealers, a division of the National Automobile Dealers Association, said the average retail price for a used Class 8 sleeper was $48,724 in January, up from $47,550 a year earlier but down from $49,819 in December.

ATD analyst Chris Visser said used 2010 models are starting to hit the market in slightly greater numbers and are holding their value relatively well compared with 2008-2009 used trucks.

“The newest trucks are bringing some strong money and not trending downwards as noticeably as the older iron,” he said.

Gary Meteer, director of aftermarket and commercial vehicle data for R.L. Polk & Co., said “good, clean used trucks are still in demand.”

“The volume last year was down from 2011, but that was the best year ever for used-truck sales,” he said.

According Polk’s figures, registrations of used Classes 3-8 trucks in the United States totaled 648,900 in 2012, down 18% from 2011’s record level.

Class 8 registrations for 2012 declined 15.6% from 2011.

“At the recent ATD convention, I talked to a lot of dealers, who all said they’re working really hard to uncover the next sale, trying to get the owner of a 5-year-old truck into a 3-year-old truck and scrape together every used truck they can,” Meteer said.

Rick Clark, president of the Used Truck Association, agrees demand for used equipment has been slow, but he predicted that used sales would start to climb this month.

“People are still putting miles on, and they need replacements,” he said.

Mark Miller, sales manager at Burchfield Truck Sales in Duncansville, Pa., said used sales in January were “a little bit off, but not far.”

It remains a challenge to find low-mileage equipment, he said. “Everything has 600,000 to a million miles on it.”

But Gary Gobin, used truck manager at McDevitt Trucks Inc. in Manchester, N.H., said for him used sales have been strong in the vocational market, which makes up the majority of the company’s business.

The freight truck business, though, has been slow, he said. At truckload carrier American Central Transport in Liberty, Mo., management transfers many of its drivers’ used trucks through its lease-to-own program to attract owner-operators, said President Tom Kretsinger Jr.

“We could sell these trucks on the open market for more money,” Kretsinger said;he just wants lease-to-own to break even. But his primary consideration, he said, is to entice owner-operators to drive for American Central Transport.

Owner-operators make up 65% of American Central Transport’s driving staff, and getting the independent drivers good, affordable trucks is a valuable recruiting tool, said Kretsinger, who became chairman of the Truckload Carriers Association last week.

Associate News Editor Jonathan S. Reiskin contributed to this report.