Used truck market surging

Used truck sales and prices have been increasing dramatically, according to Chris Visser, editor of the Official Truck Guide published by the American Truck Dealers and the National Automobile Dealers Association.

“Since the beginning of the year, we have observed a drastic increase in number of trucks sold per dealership and a notable increase in selling prices for most segments of the highway market,” Visser says. “These improving conditions have led to unprecedented increases in our published values.”

The months of March and April were strong ones, with dealers selling significantly more used trucks.

“The two factors likely at work here were a need for reasonably priced replacement equipment and a lack of available new trucks,” Visser says. “The first factor was probably driven by fleets that chose not to go ‘all-in’ with the pre-buy, as well as individual buyers thinking the time was right to upgrade older equipment. The second factor was simply the aftermath of the pre-buy — namely, most of the new trucks built in the early part of the year were spoken for.”

Prices for most Class 8 highway tractors increased substantially between May and June. Daycabs and low-mileage sleeper tractors continued to lead the market, but the sector exhibiting the biggest improvement was aerodynamic sleeper trucks with average mileage.

“The implications of this phenomenon are extremely positive,” Visser says. “From a demand perspective, we can infer that basic economic fundamentals are creating a need for additional freight capacity. From a supply perspective, buyers are removing trucks from the segment of the market with the highest number of available trucks.”

Visser also cited industry backlog (truck orders vs. build rate) as cause for encouragement.

“It bottomed out at close to zero in the January/February period, which indicates the industry has transitioned into a “normal” supply/demand cycle,” he said. “In other words, new truck sales are now being driven by actual freight demand rather than the pre-buy.”

To conclude, March appeared to mark a clear turnaround point in the Class 8 highway used truck market. Customers bought substantially more used trucks than at any point last year. Selling prices for the “meat and potatoes” segment of the market – highway aerodynamic trucks with average mileage – are firming up.

Economic factors tied to the new and used Class 8 market are either up or flat. And new truck sales have been up since the beginning of the year despite the closing-out of the pre-buy, which points to higher “natural” demand.

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