The trend is clear. Used truck prices continue to fall in almost every year and model as new truck manufacturers gain the upper hand over supply chain disruptions.
So those who bought a used truck at a sky-high price a few months ago might feel buyer remorse, especially as spot freight rates have fallen and contract rates are right behind them.
The hunt for $4-a-mile charges is history. Scores of drivers who have reactivated their Department of Transportation agencies are giving up and joining rental trucking companies or quit trucking altogether.
It will take a while for used equipment prices to return to pre-pandemic levels, according to Chris Visser of JD Power Valuation Services.
“If you look at supply, the backlog of new trucks is still substantial, but deliveries have been above the historically typical 20,000 per month since March,” he wrote in the November newsletter Power’s Guidelines. “Delivering this volume of trucks in a correcting freight environment means we can expect more trades and write-offs in the future.”
Retail sales of the new Class 8 in the US rose 34.5% in October year-on-year, Wards Intelligence reported. Sales were 22,863 compared to 17,002 the previous year.
Used truck pRice still falls despite month-over-month blip
Preliminary retail volume of used Class 8s from the same dealers fell 10% in October compared to September. They were down 30% from October 2021, ACT Research reported. Retail prices have averaged 1% higher month over month, but that’s more of an anomaly than a reversal of the month-long decline, said ACT Vice President Steve Tam.
“As OEMs have continued to make incremental strides in overcoming supply chain constraints, small improvements in production logically followed,” he said.
And just as the correlation between a tight supply of new cars and stratospheric price increases in used cars has played out, the increasing influx of new trucks is pushing used car prices down.
Class 8 sleeper prices fell slightly in October. The shortage of low-mileage trucks is still keeping those prices high while other segments return to historical trends, Visser said.
In October, 3-6 year old trucks were sold an average of 2.8% less than in September and 20.8% less than a year earlier, representing an average fall in value of 5.6% per month. Newer model trucks were sold on average 41.6% more in the first 10 months of the year than in the same period of 2021.
Downward pressure on used car prices through 2023
Power expects used-car prices to continue to fall under downward pressure in 2023, but auction prices are holding up for now, though year-on-year comparisons turn negative in October.
In retail, depreciation for average mileage trucks accelerated in October. The value differential between individual makes and models is increasing, as is the influence of powertrain specifications.
Paccar Inc., the parent company of Peterbilt and Kenworth trucks, said its used models continue to outperform the industry in pricing.
“Regardless of what part of the cycle we’re in, we tend to get that premium,” Paccar CEO Preston Feight told analysts when announcing third-quarter earnings on Oct. 25. “We continue to take advantage of opportunities to sell more retail and that helps the business over the long term.”
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