Used Truck Registrations Remain Flat; Rigs Cost More, Have Higher Mileage

Registrations of used trucks barely increased in the first nine months of this year, while tight supplies of them forced buyers to pay 19% more than they did last year for trucks with higher mileage, according to market researchers.

Used Class 8 truck registrations totaled 251,934 in the United States in the first nine months of this year, just a 0.3% increase from the same period last year, mainly from a lack of supply, R.L. Polk & Co., Southfield, Mich., reported.

“These figures are a confirmation that good, clean Class 8 trucks are in short supply, with very high demand,” Gary Meteer, Polk’s account director for commercial vehicle solutions, told Transport Topics. “They have been purchased at a pretty good rate.”

Meanwhile, analysts and industry executives reported a steep rise of 19% or more in prices for used Class 8 vehicles, compared with 2010, because of the short supply.

“The scarcity in inventory has run up pricing and increased the number of miles on an average Class 8 on the market,” Steve Tam, vice president of commercial vehicle sector at ACT Research Co., Columbus, Ind., which tracks the used truck market, told TT.

“The average used Class 8 truck sold in October for $41,365, up from $40,748 in September,” Tam said, adding that average prices were up 19% from a year ago.

“The average cumulative miles for 2011 [on sold Class 8s] has been 532,900 miles . . . and it’s been fairly consistent month to month this year,” he added.

The average Class 8 truck on the market in 2005-06, Tam said, had 475,000 to 480,000 miles on it.

“Sleeper tractors, on average, are bringing 23.8% more money in [the third quarter of] 2011 than the same period a year ago” at the retail level, wrote Chris Visser, senior analyst at American Truck Dealers/National Automobile Dealers Association Official Commercial Truck Guide. The guide was published in the November issue of the Used Truck Association Industry Watch, its monthly newsletter.

“Welcome to a brave new world in which six-year-old sleeper tractors with 540,000 miles sell for nearly $50,000,” Visser wrote.

Meteer said that registrations of used Class 8 trucks bottomed in 2008, during the recession, then began to rise until the supply of trucks dried up.

“The market hit the bottom at 194,000 used Class 8 registrations in 2008,” Meteer said. “That figure rose to 227,000 in 2009” as the economy improved. He said that new owners registered about 250,000 used Class 8 vehicles in the first three quarters of 2010.

Predicting that “used Class 8 registrations will be flat this year, projecting 321,000 units, about the same as 2010,” Meteer said, “The reason is simply just a lack of availability.”

Polk reported that 320,000 used Class 8s were registered last year.

The firm considers a used vehicle to be transferred to a new owner only when it is registered in both a different name and at a different address, the report said.

At the same time, the overall fleet size is falling but getting gradually younger, an effect of the recession.

“The commercial vehicle population continues to get younger as the extremely older models are taken out of service and replaced with both new (first time registered) and clean used equipment,” Polk said in its report, referring overall to Class 3-8 used vehicles.

“Since the end of the 2010 calendar year, the total vehicle population has declined by 264,000 units,” according to the report; “however, vehicles of model year 1999 and earlier have declined by 541,000.”

The Polk report showed that 1.47 million trucks of the total fleet of 3.5 million Class 8 trucks were built in model years before 2000.

Tam predicted that “the current situation won’t go on for three to four years, but the shortage will probably continue through most, if not all, of 2012 and into 2013. It will start to pick up as things start to break loose on the new [truck] side.”

WardsAuto.com has reported that U.S. customers bought 133,399 new Class 8 trucks through October, a 55.5% increase, compared with the first 10 months of last year (11-21, p. 1).

Tam also said that many old trucks could be exported rather than sold for salvage.

“The export markets could be taking older and much higher-mileage . . . equipment,” he said. “It’s historically in the $15,000 to $17,000 range. It’s a nice outlet because people here don’t want it.”

Rick Clark, UTA president, said that newer used trucks, trade-ins from the much higher sales volume of new trucks in recent months, have begun to enter the market.

“Newer trucks from 2008 and ’09, with higher mileage than average, are starting to hit the market,” Clark told TT. “Not a lot yet, but quite a few, and yes, they are getting a pretty high price. Prices are up from shortages and supply and demand.”

Clark said that several wholesale UTA members reported an unexpected slowdown in business in November, “but retail sales remain strong, though not as strong as it was.”

It was not yet clear why the November slowdown occurred, he said.

“Usually in December, it slows down a bit,” he said, “but this was a little bit early,”

Clark, also vice president of National Truck Protection, Cranford, N.J., which sells warranties on used trucks, said the company projected it would sell a record number this year.