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Used Truck Sales Nudge Upward in April

Used-truck sales in April inched up year-over-year, compared with the 2016 period, amid a heavy-duty market that saw auction prices hit bottom and replacement demand climb, analysts said.

Sales were 3,382 compared with 3,337 a year earlier, ACT Research Co. reported, based on its sample of dealers, wholesalers and auctioneers as well as a few large fleets.

ACT uses the sample to determine average prices, age and mileage. It includes about 13% of the total market, which is statistically enough to project market conditions, according to the company. By that measure, total April sales rose to 26,015 compared with 25,669 a year earlier, ACT said.

In the ACT sample, year-to-date sales increased to 14,034 from 12,278 a year earlier. That extrapolates to a total of 107,953 trucks sold through the four-month period compared with 94,446 in the 2016 period, good for a 14% gain.

“It’s a buyer’s market,” ACT Vice President Steve Tam told Transport Topics.

“The equipment out there is at the lowest price in a couple of years; it’s the youngest and has the least miles. And we have a sufficient amount of inventory, so there is a good selection,” Tam added. “[Buyers] must be seeing something in their businesses that is encouraging them to go ahead and make transactions. It bodes well for the whole market, really.”

The price for the average used Class 8 truck was $40,389 in April compared with $44,630 a year earlier, ACT reported.

“Pricing is essentially stable and flat around $40,000,” Tam said, “and we expect it to really hang out there for the remainder of the year.”

Chris Visser, senior analyst for commercial trucks at J.D. Power Valuation Services, noted that Class 8 auction pricing continues to flatten out despite higher volume.

At auction, the average price for his 2013 benchmark sleeper tractor was $31,443; that was $251, or 0.8%, higher than in March. For a 2012 sleeper, it was $26,314; $208, or 0.8% lower than March. A 2011 model sold for $23,810; $323, or 1.3% lower than March, according to Visser.

“We view these flat-to-upward pricing results positively. It is looking more likely that auction pricing has hit bottom,” he wrote on his commercial truck blog.

Visser tracks tractors sold through the two largest nationwide, no-reserve auction companies, which he did not identify.

At the same time, replacement demand is strong among smaller fleets and owner-operators, Longbow Research Analyst Neil Frohnapple said.

After surveying, respectively, dealers for Volvo Trucks North America and Daimler Trucks North America, 35% of his contacts reported that retail used-truck sales had increased in the second quarter of 2017 compared with the first quarter — while 60% said sales were in line and 5% noted a decrease.

Frohnapple quoted a VTNA dealer in the Midwest, who told him, “We’re still a little high on late-model sleeper trucks. However, demand has improved versus what it was in most of 2016, so there’s light at the end of the tunnel. Even better, wholesale values for these models are not significantly declining like last year, so we don’t feel as concerned having this much inventory on our lots.”

The number of miles on the average Class 8 truck was 461,000 compared with 471,000 in the 2016 period, ACT said.

The age of the average Class 8 truck rose slightly to 7 years, 2 months. That compares with 6 years, 11 months, a year earlier, Tam said. “But that’s within the normal noise.”