Sales of used Class 8 trucks climbed in November, rising 16% year-over-year as the inventory of available trucks has fallen sharply, according to ACT Research Co.
Sales among ACT’s sample of dealers, wholesalers and auctioneers as well as a few large fleets — all of whom consistently report — reached 3,455, the group said. The sample represents about 16% of the total market, which is statistically enough to project market conditions. According to ACT, total sales in November were 21,593 compared with 18,543 a year earlier.
ACT uses its sample to determine average prices, age and mileage in the marketplace.
“We are continuing to show strong demand in the used truck market, and that has been a good-news story. As we have continued to see a flow of trucks into the space, we have been able to pretty much keep pace with them,” ACT Vice President Steve Tam told Transport Topics.
At the same time, inventory has fallen to about 70,000 to 75,000 Class 8 trucks. “Last year at this time, we estimate that used truck inventory was around 100,000 units,” he said.
ACT estimates total sales of used Class 8 trucks will dip to 270,000 in 2017 from 275,000 in 2016.
The price of the average Class 8 truck was $39,431 in November and has remained flat year-over-year — the price in November 2016 was $39,234.
“Stabilization of the values is a good thing for the marketplace. People can plan on that, hang their hat on what their truck is going to be worth, either when they go to trade for new trucks or purchasing used trucks,” he said.
Pricing has been in that range since February, he added.
In November, the average truck was newer and had fewer miles compared with a year earlier.
Mileage dropped to 454,000 compared with 461,000.
The average age slipped to 6 years, 11 months. A year earlier it was 7 years, 2 months.
The number of retail sales per dealership slipped by 0.7 trucks month-over-month, noted Chris Visser, senior analyst for the American Truck Dealers/NADA Official Commercial Truck Guide.
“November is not typically a strong month for sales, and pricing has been firm in recent months. November’s result is most likely just a normal variation in a month that includes a major holiday,” Visser wrote.
Increased freight growth and higher fleet capacity utilization are key factors at work in the industry, Don Ake, vice president of the commercial sector at research firm FTR, wrote in a blog.
Freight growth was 2.9% in the first quarter of 2017 and is forecast for 4.6% in the fourth quarter, which would bring the total year to 3.6%, according to Ake.
Ake added that capacity utilization is expected to reach “as high as 97%” over the next year, putting increased pressure on an already tight market. “This has caused problems for shippers who are having problems finding trucks to make on-time deliveries,” Ake wrote.
Looking ahead, ACT’s Tam said new truck sales in the United States were expected to increase 25% in 2018 compared with 2017 — climbing to 250,000 from 190,000.
“If we don’t see that corresponding increase in demand on the used truck side, we are going to end up with another over-supply situation, which will potentially put downward pressure on used truck prices,” he said.