Fleets Bear the Pain in Bull Market for Used Trucks
A classic glut has created a buyer’s market for good quality, low-mileage Class 8 tractors. Photo: Ritchie Bros.
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A classic glut has created a buyer’s market for good quality, low-mileage Class 8 tractors. Photo: Ritchie Bros.
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A used truck market that has been unusually soft for months is showing signs of leveling off, industry experts say. However, a glut of used trucks remains on the market and, in extreme cases, some fleets actually owe more for equipment than it is now worth on the secondary market.
The roots of this soft secondary market date from late 2015. Large fleets had placed large orders for trucks as the U.S. economy began to rally in the 2013-2014 timeframe. But the economic upsurge didn’t last. By the 3rd quarter of 2015, retail orders were lagging and manufacturing levels fell off as a result. As freight volumes dropped in response, fleets began to shed suddenly excess equipment, resulting in high volumes of relatively low-mileage trucks, in excellent condition landing on dealer lots all over the country.
“Yes. It’s a classic truck glut,” said Chris Visser, senior analyst and product manager, commercial vehicle valuation services for J.D. Power and Associates. “Supply in the used truck market still outstrips demand, although we have tracked a gradual trend since January or February of this year indicating more retain buyers are purchasing – which of course goes hand-in-hand with the excess inventory and the overall quality of the used equipment available today.”
Citing J.D. Power’s Commercial Truck Guidelines Industry Update, released earlier this month, Visser noted that the average sleeper tractor sold wholesale in March was 70 months old, had 535,833 miles, and brought $29,314. Compared to February, trucks sold in March were one month newer, had 1,515 (0.3%) fewer miles, and brought $85 (0.3%) more money. Compared to March 2016, the average sleeper sold this month was 12 months newer, had 85,719 (13.8%) fewer miles, and brought $4,385 (13%) less …Read the rest of this story
