Used Trucks Become Scarce; Prices and Mileage Increase

The scarcity of low-mileage used Class 8 trucks has gotten worse, pushing prices nearly 25% higher than what comparable vehicles cost last year, dealers and market analysts said.

Many purchasers bought trucks with nearly twice the number of miles on them than what was available before the recession, they said.

“The scarcity of Class 8 inventory got worse in June over what had been already a very difficult spring for our members,” said Rick Clark, president of the Used Truck Association. “From all reports, there are just almost none of what had been normally the most common over-the-road used truck, with 300,000 to 400,000 miles on it.”

“Customers still want to buy low-mileage used trucks, and they’re not out there. They are just impossible to find,” Bryan Boyd, owner of Boyd Truck Center Inc., Tulsa, Okla., told Transport Topics.

Boyd said he is mostly seeing sales of trucks with 600,000 to 700,000 miles, and that prices are up about 15% from a year ago.

ACT Research Co. said its latest survey found that dealers sold 2,148 used Class 8 trucks in June, down from 2,581 in June 2010. However, June’s sales did represent a 9% increase over the 1,971 sales recorded in May.

ACT said it tracks about 10% of the market, surveying 635 retail and wholesale dealers, along with auction sites.

“The volumes themselves don’t tell us what’s really important in the market,” said Steve Tam, ACT’s vice president of the commercial vehicle sector.

However, Tam added that dealers “don’t have enough trucks to sell, and prices are still increasing. This is not a good time if you’re a buyer of used heavy-duty trucks.”

Tam stated that ACT found the average used truck on sale in June had an increase of 3% in age and mileage from those available in May, and that the average price was up 24% in June from a year earlier.

Clark, UTA’s president, is also vice president of National Truck Protection, Canford, N.J., which offers warranties for used trucks.

“This situation has been very good for our business,” Clark said. “Many more buyers are willing to buy our warranties when they’re getting used trucks that are in the upper limits of what over-the-road trucks can run without some running into expensive repair problems.”

Eddie Walker, president of Best Used Trucks, Fort Worth, Texas, said he also has had to develop a new business model to succeed in the new environment.

“What I’ve been involved in now is often dealing with trucks that have 800,000 to 900,000 miles on them,” Walker told TT. “Those trucks are hard to buy and hard to sell, so that they have to be priced right to sell.”

He said one major problem is that many used buyers would rather buy older trucks than those from the “2008 and 2009 model year.”

Those trucks, built in 2007 and 2008, included engines designed to meet 2007 federal emission standards, and many fleets complained about their unreliability.

Walker also said that prices are generally $3,000 to $5,000 a vehicle higher than a year ago.

“First, they didn’t build that many new trucks because of the recession, and what they did build, most of them stayed on the ground — which I mean, in the shop, because they couldn’t run,” Walker said. “Buyers back then weren’t happy with them, and buyers now aren’t happy with them.”

Walker added that customers will quickly snap up 2010 and any 2011 model year trucks that come onto the used market.

“I’ve even been selling trucks with more than a million miles on them,” Walker added.

Tam said that dealers still have not seen large quantities of product coming from trade-ins from buyers of new Class 8 trucks, even though deliveries have risen sharply in recent months. Sales of new Class 8 trucks in the United States totaled 14,647 in June, a 64.6% jump over the same month last year (7-18, p. 1).

One dealer, who asked not to be identified, gave another reason why used trucks are scarcer in traditional lots.

“A major fleet in my region just bought more than 300 new Class 8s,” the dealer told TT. “In the past, he would always just trade in his old trucks, but this time, he turned the entire load over to me, and he will get higher prices.”