Prices of newer used trucks with low mileage are reaching historic levels with new truck deliveries slowed by supply chain issues and an ongoing shortage of microchips.
“[Auction] pricing for trucks with under 600,000 miles is in the stratosphere,” J.D. Power Valuation Service reported in its latest Commercial Truck Guidelines newsletter. For example, model-year 2018 trucks with under 500,000 miles are selling at auction for around $70,000.
Compared to the first four months of 2020, Power’s benchmark group of 4-to-6-year-old trucks were selling for 76.6% more than the same period a year ago.
“We don’t see much relaxation in pricing for trucks with average to low mileage for at least another two months,” the newsletter said.
ACT Research reported that preliminary used Class 8 same-dealer sales were 51% higher year-over-year. Activity for the first four months is running 29% ahead of the same year-ago period. Class 8 prices are up 45% over April a year ago.
Lack of selection
At retail, sales per dealership could have been higher but were constrained by a lack of selection, Power said.
The average sleeper tractor sold at retail in April was 68 months old, had 432,099 miles and brought $62,786. Compared to April 2020, the average sleeper was seven months older, had 34,740 (7.4%) more miles and brought $20,514 (48.5%) more money, Power said.
Retail prices have been rising since the fourth quarter and could reach historic highs before leveling off, Power said.
“Industry consensus tends to be through year end. I’m a little bit more cautious,” Eric Samp, director of used trucks at Aim Transportation Solutions, told FreightWaves. “I would definitely say through the summer and late third quarter, early fourth quarter.”
Aim prices are averaging 25% higher than three to six months ago because its product mix skews newer, Samp said. The Girard, Ohio-based company gets 95% of its inventory from a fleet of 11,000 rental and lease units across the 16 states where it operates.
“For us, it’s 26-foot box trucks with decent miles and a liftgate that are selling,” Samp told FreightWaves. “We can’t keep them in inventory.”
Following box trucks heavily used for regional delivery, demand at Aim locations is for low-mileage sleeper cabs and daycabs with around 200,000 miles on the odometer.
Tailwinds and headwinds
Pandemic-influenced consumer demand has driven freight rates to record levels.
“We’re assuming consumer spending on goods has some expansion left, as we’re just now reaching where we left off pre-COVID,” Power said. “Major tailwinds include stimulus benefits (for now), improving employment, the shift to permanent work from home, changing residential patterns and inventory bottlenecks.”
Three possible headwinds for freight, according to Power, are a cessation of benefits, inflation and an incremental shift in spending from goods to services.
“This industry within the past seven to eight years has been big peaks and big valleys,” Samp said. “We’re definitely at the peak right now. Everybody in the industry knows [the next dip] is going to come, it’s just a matter of when so you’re just going to have to prepare for it.”