For owner-operators truck shopping, this is the best of times and the worst of times.
While the selection of used trucks is vast and prices are comparative bargains, it’s harder to buy. Many traditional financing sources have either closed their doors or tightened their standards. Freight is down, making it more difficult to predict or sustain income for making truck notes.
As the recession drags on, many owner-operators are holding on to their rigs longer to conserve capital. While they would like to replace aging vehicles with newer ones, they are taking the prudent course and maintaining what they have until the business environment rebounds. As they stay on the sidelines, the used truck market remains weak.
“It’s pretty bad for the used truck market,” says Eric Starks, president of consultant FTR Associates. “There’s a lot of equipment out there. There are plenty of people who are upside down on their equipment,” meaning they owe more on the truck than it is worth.
Starks says even if the used truck market springs back, it will take time to work through the inventory sitting in warehouses and on dealer lots. He expects the tough market to last into 2010.
Carl Heikel, president of Arrow Truck Sales, says business was bad during the downturn in 2001, but nothing like this. “This has been much worse than at any time in the 59 years of Arrow Truck Sales,” he says.
Terry Hebron, president of Heavy Trucks and Equipment Wholesalers, a used equipment website, says he’s been in trucking for 40 years and involved in used trucks since 1985, but describes the current market as the worst he’s seen. “A lot of dealers I talk with weekly are barely hanging on,” he says. “They’re cutting back on small expense items just to survive.”
