Used truck prices down more than 20% in 2016

| December 21, 2016

Depreciation of used commercial trucks has accelerated in the second half of 2016 according to J.D. Power and Associates.

truck lot

The used truck market is expected to see a flood of inventory in the coming years, which will likely continue to depress used truck pricing.

The average sleeper tractor retailed in October was 72 months old, had 463,378 miles and brought $49,661.

Since January, 3-to 5-year-old sleepers have lost about $14,500 (21 percent) of their retail value, which J.D. Power analyst Chris Visser says translates to just over 2 percent depreciation per month.

“In terms of individual model years, 3-year-old trucks have lost about 19 percent of their value since January, 4-year-old trucks have lost about 19 percent, and 5-year-old trucks have lost about 24 percent,” he adds.

Retail depreciation is still 1 to 2 percentage points better than expectations, but Visser says based on returning supply, there will be more downward pressure on pricing than upward over the long term.

Since the turn of the year, model year 2013 trucks have lost about 22 percent of their value on the wholesale market. Visser says model year 2012 trucks have lost about 37 percent of their value, and trucks of model year 2011 have lost about 31 percent.

Used truck prices poised to continue to fall until 2020, analyst says

Given the high truck build rates in 2014 and 2015, the market for 3- to 5-year-old tractors is set to be flooded in the coming ...

“These figures translate to an overall monthly loss of about 3 percent, which means the market has just about caught up to our earlier estimate of 3 to 5 per month,” he says. “Three percent is still better than the nearly 5 percent average monthly loss in the heaviest depreciation period of 2015, but trucks sold this time last year were bringing more than 30 percent more money than now.”

Based on the expected returning supply of 3-to 5-year-old trucks in the long term, Visser says he expects auction volume to continue to trend upward and pricing to trend downward.

The average sleeper tractor sold wholesale in October was 80 months old, had 563,349 miles and brought $30,863.

 

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