Used Truck Registrations Boom as New Class 8 Sales Increase

This story appears in the May 24 print edition of Transport Topics.

U.S. registrations of used Class 8 trucks jumped to 69,474 vehicles in the first quarter of the year, nearly 54% more than the same period in 2009, R.L. Polk & Co. said.

Dealers attributed the growth to a rapid increase in freight demand, which is encouraging larger fleets to purchase new trucks and to sell their used equipment to other carriers.

“There seems to be an increase in freight demand, and end users are confident that the trend will continue and are buying trucks in order to handle this,” Marty Crawford, senior account manager of Arrow Truck Sales, Kansas City, Mo., one of the major wholesalers and retailers of used trucks in the country, told Transport Topics.

“We’ve had a very robust increase in Class 8 sales this year, with back-to-back record sales months. . . . Our sales are up 50% over the first quarter of 2009. . . . Both wholesale and retail sales are up very strongly,” said Crawford, who is also president of the Used Truck Association, based in Stockbridge, Ga.

So far this year, sales of new Class 8 trucks are up 13.9% over 2009 levels.

Crawford said many of the used trucks “are coming from fleets who buy new trucks directly from the manufacturers and trade in their old ones,” while others are coming from wholesalers and used truck auctions.

Kyle Treadway, president of Kenworth Sales Co., Salt Lake City, which has 20 locations in six Western states, agreed that the used truck business is picking up. “Used heavy-duty truck sales started improving last November and each month has gotten progressively better, both in price and demand.”

Polk Commercial Vehicle Solutions, a division of R.L. Polk & Co., Southfield, Mich., said May 13 that new registrations of used Class 8s in the first three months of 2010 were the highest for any first quarter since it began keeping these records in January 2004.

New registrations of used Class 8 trucks totaled 45,237 in the first quarter of 2009; the highest overall quarterly total was 83,036 in the third quarter of 2009.

Polk counts initial registrations of new and used vehicles, or when used vehicles change owners and are re-registered.

Dealers agreed there was a rapid decrease in the supply of available late-model used trucks.

“UTA members have told me that in February and March, late-model used trucks were in big demand and selling very well,” George Barnett, president of Truck Remarketing Services, Brookfield, Conn., and a member of UTA’s board of directors, told TT.

While new truck sales have increased over depressed recession levels, dealers said they are still relatively low by historical standards.

“New truck manufacturing is down below normal levels because of economic conditions, and that has made the market for late used models come around,” Barnett added.

He said that stocks of used trucks available for sale have fallen considerably.

“Before, I had been seeing e-mails from UTA members seeking to buy used trucks wholesale for their stocks, asking for four or five units, but more and more, they are asking to buy 40 or 50 trucks,” Barnett said.

Treadway, also chairman of American Truck Dealers, said, “What has deteriorated is the supply of used Class 8s most in demand: late model and low mileage of 300,000 miles or less. We’re anticipating that there won’t be any supply left of these trucks by the third quarter.”

“We’re selling many more trucks than we’re taking in,” said Arrow’s Crawford, based in Atlanta. “Stocks of low mileage Class 8s are almost nonexistent.”

He also attributed the shortage to “low production years in new trucks.”

U.S. sales of new Class 8 trucks hit a record 284,008 units in 2006, then dropped in following years, to 94,798 last year (1-25, p. 1).

Not all used truck executives have seen a surge in sales.

“In auctions, we have only maintained sales rates of recent years in used Classes 7 and 8 in the first quarter, or we even saw a decrease,” Karen Braddy, manager of heavy trucks and equipment at Manheim Heavy Trucking & Equipment, Atlanta, told TT.

“The average sales price decreased in 2009, but we have had some increases this year, rising from a low in January to higher prices in March,” Braddy added.