Used-Truck Prices Hold Near Record Highs, Despite More Late Models Hitting Market

This story appears in the Oct. 20 print edition of Transport Topics.

Prices for used trucks in the United States remain near record highs as strong demand outweighs a growing supply of late-model units, dealers and analysts said.

The average retail price for a used Class 8 sleeper sold in August was $60,459, just below July’s $60,767, which is the all-time high, American Truck Dealers reported. August’s price was up 11.8% from $54,090 in the same month last year.

Separately, ACT Research said average pricing for all used Class 8 trucks — including retail, wholesale and auction sales — was $47,467 in August, a slight decline from July but up from $41,000 a year earlier.

The top five months on record for used-truck prices were April through August, ACT said.

“Pricing has just been strong,” said Steve Clough, president of used-truck dealer Arrow Truck Sales, which is part of the Volvo Group. “The need for trucks has been pretty consistent and the supply has been really, really tough.”

One key factor contributing to that inventory challenge is the low number of new trucks built during the recession, which are now among the prime models for the secondary market.

The industry may be seeing some relief on that front, though.

“The first year that had close to the normal retail sales was the 2012 model year,” and those trucks have been starting to reach the used market in higher volumes, Clough said.

Those models generally would have been built during 2011, when new Class 8 sales rebounded to 171,358 units in the United States, compared with just 107,152 in 2010 and 94,798 in 2009, according to WardsAuto.com.

ATD analyst Chris Visser said the availability of late-model trucks has not been enough to meet the market’s demand.

“We have seen a pretty steep increase in the number of 2011 and newer trucks traded in,” he said. “I’m a little surprised that prices have stayed as high as they have for those trucks, and that just indicates that there’s such high demand that the supply hasn’t satisfied it yet, even with the increase.”

ACT Vice President Steve Tam also pointed to continued supply shortages.

“We’re still in a situation of scarce late-model, low-mileage vehicles,” he said. “We had expected to see some relief on that side with new truck sales picking up, but it seems like we’re getting some fleet growth among the new truck buyers so we’re not getting a one-to-one trade and that’s perpetuating that scarcity.”

He also agreed that the after-effects of the low-build years continue to hurt the supply of used trucks today.

“Those were some of the slimmest years in history for new-truck production, so when those trucks are the ones that are becoming available as used trucks, it’s going to be a small number,” Tam said.

“At some point, we’re going to see some relief,” he added, “but it may not be for another 12 to 18 months before we get there, at least in a meaningful way, where it starts to have an impact on pricing.”

While prices remained high, overall sales volumes slipped in August.

The sellers surveyed by ACT moved 2,194 used Class 8 models in August, down from 2,342 a year earlier and 2,436 in July.

ACT’s data represent about 10% of the overall market.

Average mileage for the used trucks sold in August declined to 530,031 from 548,033 a year ago and 574,617 in July, according to ACT.

“I think we’re at the leading edge of fleet trade-ins of trucks that were made when things started getting better,” said Sam Blumoff, owner of Carrier Truck Sales in St. Louis.

He said it seems that the supply of used trucks is starting to improve but is still nowhere near the level of demand.

JT Thornburg, wholesale manager at Stoops Freightliner, a dealer with locations in Indiana and Ohio, said a greater number of 2010 to 2012 models are coming in, but desirable 2007 and earlier models are tough to find.

Thornburg said the used-truck business has become much more competitive than it was a decade ago, as an increasing number of trucking companies have been doing their own remarketing of vehicles.

A recent report from Black Book predicted that large numbers of new truck deliveries will lead to an “extremely high” volume of used trucks showing up at auction in the coming months.

The report also found that 2012 and 2013 model over-the-road tractors depreciated by an average of $531 during September, while values of regional tractors declined by $688 and vocational trucks dipped by a “minimal” $35.