Used Truck Prices, Sales Climb in July
Used truck sales rose in July, as did the average price in a hot market where finding inventory to buy or sell is a challenge, ACT Research Co. reported.
“It turned out to be a pretty decent month,” ACT Vice President Steve Tam said. “I think part of what is going on is we have seemingly — I don’t know about a shortage of inventory — but not as much inventory as we like to have, which is keeping a lid on volumes.”
That’s a change from even six months ago, he said.
Tam
The retail and wholesale markets show year-over-year increases of 18% and 3%, respectively, but the auction channel was down 10% compared with July 2017, according to ACT.
On an estimated market basis, 22,900 used Class 8 trucks were sold in July compared with 21,000 a year earlier, according to ACT. The firm surveys dealers, wholesalers and auctioneers, as well as a few large fleets, to determine average prices, age and mileage.
The price of the average Class 8 truck leaped to $45,057, up 13%, compared with $39,950 a year earlier.
Mileage essentially was flat at 453,000.
The age dropped to 6 years, 11 months. That was down from 7 years, 3 months.
One trucking executive called the used truck market aggressive and a place where you have to throw your wish list away.
“The good stuff is gone quick. It is a whole different mindset from being able to sit down with salesmen and manufacturers and vendors to take two to three months to spec item by line item on new equipment,” said Jarit Cornelius, vice president of asset maintenance and compliance for Sharp Transport Inc.
“On the used side, of course, you don’t have that luxury,” he said. “You try to pick and choose what you would like to have, but with the market right now I’m having to throw my wish list out the window and say, ‘Find me what you can, and we will see if we can make it work.’ ”
Tennessee-based truckload carrier Sharp created a new flatbed division and stocked it with used trucks from California, Texas, Oklahoma and Tennessee, Cornelius said.
A Sharp truck. (Sharp Transport Inc.)
He started the process of selecting used trucks the first week in July and by mid-August still was waiting on delivery of the final two.
The availability of used trucks is going to start climbing again, industry observers predict, as trucks bought in the strong years of 2014 and 2015 begin to hit the market.
“More trucks are traded in after five years than at any other age,” Stifel, Nicolaus & Co. investment analyst Michael Baudendistel wrote in a note.
Meanwhile, a survey of 20 dealers of Navistar Inc.’s International Truck brand found demand was up, on average.
Specifically, 60% reported that used truck demand in the fiscal third quarter increased at their dealership compared with the second quarter, 25% stated demand is flat since the second quarter and 15% of dealers noted that used truck demand is down at their dealership compared with the previous quarter.
The survey was conducted by Neil Frohnapple, director of equity research at The Buckingham Research Group.
“Used truck demand is surprisingly better than we expected — we have even had people purchase some trucks that were equipped with the Maxxforce engines [the first of which before 2013 were plagued by emissions issues] because they need trucks quickly and those trucks are relatively cheap,” a dealer responded in Frohnapple’s survey.
Additionally, 70% of the contacts revealed that they expect used truck prices to increase overall in 2018, and 30% anticipate used truck prices to be flat for the full year, according to Frohnapple.
At the same time, compared with July 2017, the average sleeper was seven months older, had 8,131, or 1.8%, more miles, and brought $5,606, or 11.8%, more money, Chris Visser, senior analyst for commercial vehicles at J.D. Power, wrote in a blog.
Looking at the changing mix of models, Visser wrote, “On a year-over-year basis, late-model trucks sold in the first seven months of 2018 brought 6.2% more money than in the same period of 2017. Depreciation averaged 0.9% per month. This figure compares favorably to the 1.6% depreciation in the same period of last year. The market is still heavily weighted toward demand rather than supply.”
