Used-Truck Prices Rising, Even for Older Models

This story appears in the April 7 print edition of Transport Topics.

COLUMBUS, Ind. — Used-truck prices continue to rise in 2014, including for older models with higher mileage, an executive with ACT Research Co. said.

“There were a limited number of trucks produced from 2008 to 2010, following the peak year of 2006 during the pre-buy” before new federal emissions regulations took effect in 2007, ACT Vice President Steve Tam said.

“We’re reaping the consequences now” of fewer used trucks hitting the market then, Tam said here March 25 at ACT’s seminar prior to the Mid-America Trucking Show in nearby Louisville, Ky.

ACT said the average selling price of used Class 8 trucks set a record in February for the second consecutive month at just more than $44,400, although the group expects prices to tail off later this year.

“Despite the record selling prices, based on the assumption of satisfying some of the pent-up demand, prices are expected to cool slightly in 2014,” Tam said.

He estimated prices likely would not fall more than 5% this year.

ACT also forecast a growth of 13% in new-truck sales this year.

“Some of that [new-truck growth] is replacement, some is fleet growth,” Tam said. “What it means is that more trucks than normal will go into the used-truck market.”

From 2008 to 2010, a lot of trucks were “parked on the fence” and underutilized, largely due to the recession, Tam said.

“When those trucks get into that six- to eight-year timeframe — which they are now — we may start to see the impact of those trucks having less mileage” as they enter the market, he said.

ACT said average used-truck mileage has crept over 550,000 miles. That is slightly higher than 2013, which was down slightly from 2012.

In addition, the average age of a used Class 8 truck on the market has risen steadily, topping out at 90 months this year, from about 87 months in 2013. Before that, the age was below 84 months from 2005 to 2012, the group’s figures show.

At the same time, used-truck prices are rising. Trucks that have between 300,000 and 400,000 miles are hitting near $60,000 this year, up from about $55,000 last year.

Trucks with 400,000 to 500,000 miles are getting about $57,000 on average, up from $48,000 a year earlier, and trucks with between 500,000 and 600,000 miles are pulling in about $45,000, up from $40,000.

Even trucks with 600,000 to 700,000 miles are averaging $33,000, up from $30,000, ACT said.

Higher exports to Mexico has led to a boom in the used-truck export market in the past two years, with Class 8 tractor exports rising to 22,000 units last year, up from 15,200 in 2012 — a 31.5% jump, Tam said in his presentation.

Mexico — which made up the bulk of North American exports in 2013 — saw the biggest increase, at 60% of total exports, up from 20% in 2012, according to International Trade Commission figures.

Tam said Mexico had reportedly opened its border to 2005-2006 year models, “in essence opening the floodgates . . . [with] a corresponding demand for used trucks.”

Africa, led by Nigeria, made up about half the U.S. export total in 2012, and fell to about 25% last year. ACT predicts that U.S. Class 8 exports will dip to about 19,000 units this year, the highest level besides last year’s total since 2008.