Article Summary
May seasonal expectations largely met in broad used-truck market
- Market-research services' indices all showed some pricing softness in used markets in May, compared to the prior month.
- Among the newest used sleepers, prices remained slightly elevated over the same month last year, following increased sales with spot markets' run-up early this year.
- The prospects of serious de-escalation in Iran could drive some used demand slowdown, and further pricing declines.
Pricing for used trucks in the retail market held relatively stable in May compared to April, largely continuing a trend seen over the last two years based on data from Fusable’s Price Digests.
The firm, a sister company of Overdrive’s, tracked two-year-old used Class 8 sleeper tractors selling for slightly less in May than in April, while pricing for 5- and 10-year-old units was mostly flat.
Those newest used trucks, as shown in the chart, have experienced the most pricing instability in recent times, ranging from less than $90,000 to more than $107,000 in the last two years.
Broken out by manufacturer, Peterbilt and Kenworth sleepers are holding their value best in the 2-year-old range, according to Price Digests data. Used Pete tractors of that vintage held an average 53.8% of their value, while 2-year-old Kenworths held 50.4%.
J.D. Power in its monthly “Commercial Truck Guidelines” report tracked an overall 1.3% decline in 3-5-year-old sleeper tractor retail sales prices during May, which was about 3% higher than the same month a year ago. Auction pricing was down by 3.2% in May from April.
Used sleeper tractor prices are back to near where they were at the beginning of 2019.J.D. Power
ACT Research, likewise, reported a 1% decline in used-truck pricing for May in its preliminary “State of the Industry” report for the month.
“The preliminary average retail price (same dealer sales) of used Class 8 trucks was steady in May," slipping just 0.6% from the prior month to "land at $59,601,” said ACT vice president Steve Tam. “Pricing easily defeated seasonal expectations, which called for more than a 5% decline.”ACT Research
Sandhills Global, on the other hand, reported a nearly 3% upswing in asking prices for used sleeper tractors in May.
With real de-escalation of the conflict in the Middle East looking more possible, J.D. Power noted that lower fuel prices, and thus lower fuel surcharges in the freight market, might slow demand for used trucks.
The firm reported slightly lower sales per dealership in May compared to April, “which showed strong promise earlier this year. It is logical that a spike in late-model used truck purchases coincided with a steep increase in spot rates, and we did not assume sales activity to remain at those elevated levels indefinitely."
A two-month sales volume decline "suggests trade-in activity and drivers entering or re-entering the industry are factors with a ceiling,” J.D. Power said, unlikely to jump higher than the initial surge.
ACT Research observed a much more notable 13% decline in same-dealer sales for used Class 8 trucks from April to May.
“The decline was larger than expected based on historical seasonality, which called for a 3% m/m decrease,” Tam noted.
However, auction sales ballooned 79%, outperforming historical expectations, he said. Even with wholesale volume declining by 19% from the prior month, total sales “finished May up 9.4%” from April, Tam added. “The fact that the total market is in sync with seasonal expectations is a welcome testament to the long-awaited balance and stability of the current market.”
[Related: What's your truck worth? Ways to assess market value for sale, purchase, insurance]
