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November 30, 2017 1:00 PM, EST
Used Truck Sales Climb in October
Prices Steady, Mileage Lower
Ritchie Bros. Ritchie Bros.

Sales of used heavy-duty trucks in October climbed 37% from a year ago as some outlets showed signs of rebounding to post higher volumes and the average price rose slightly, ACT Research Co. reported.

Sales climbed to 4,182, compared with 3,043, according to ACT, based on its sample of dealers, wholesalers and auctioneers as well as a few large fleets, all of whom consistently report.

ACT uses the sample to determine average prices, age and mileage. It includes about 18% of the total market, which is statistically enough to project market conditions, according to the company.

By that measure, total sales in October were 23,233 compared with 20,286 a year earlier.

Year-to-date, sales showed less of an increase and were 202,716 compared with 201,000 in the 2016 period.

The average price in October for a Class 8 vehicle was $40,734, up from $39,742 a year earlier.

“In my mind, it is kind of a mixed story,” ACT Vice President Steve Tam told Transport Topics.

Volumes are holding up. The auction and retail segments have been hard-pressed to find trucks, but that is starting to change and pricing is also holding up, he said.

“The bigger story in used trucks is ‘watch out’ — because of the strength of the new truck market,” Tam said. “With better-than-expected [new truck sales] strength this year, and even building further upon that as we move into 2018.”

In October, new Class 8 sales rose 31.6% year-over-year to 17,928, after gaining strength starting in June, according to WardsAuto.com.

Simply put, more used trucks will be cycling into the market sooner than most initially anticipated, Tam said. “As long as the demand side holds up, we should weather that pretty well. But I’m concerned that might not happen.”

Trends Tam is watching that could end up “cannibalizing” a portion of the customer base for used trucks are the acceleration of trade cycles for smaller fleets plus the conversion of some traditional used truck buyers to new trucks.

Meanwhile, the mileage of the average Class 8 truck in October fell to 447,000 miles compared with 455,000 a year earlier, Tam said.

The average age dropped to 7 years and 1 month. A year earlier, it was 7 years and 4 months.

Finding supplies of used trucks sold at auction is somewhat harder lately, said Mike McMahon, Ritchie Bros. strategic accounts manager, transportation. The company is a leading global auctioneer of heavy equipment and trucks — both online and at locations — besides providing other related services.

“I would tell you the year really started off with a bang. Pricing increased from where we ended last year. That trend has continued, we have had steady-to-strong pricing in the market for Class 8 on-highway vehicles. But whether it is truck makers, dealers or fleets because they have some really good re-marketing teams, they are capitalizing on a strong market — a strong sellers market.”

Also, buyers are now searching for Class 8s with automated manual transmissions, McMahon said. “They are seeing the fuel economy savings and safety benefits.”

However, while auction volumes were down, recent pricing stability suggests a balance between supply and demand, Chris Visser, senior analyst for the American Truck Dealers/NADA Official Commercial Truck Guide, wrote in his latest report.

Sales of the most common sleeper tractors at auction and wholesale were flat, Visser wrote. For example, model year 2013 sleepers brought $28,120, or 1.2% more than in September.

Over-the-road 2014-15 trucks had the least amount of depreciation over the past 30 to 45 days, said Charles Cathey, heavy-duty truck editor of Black Book, which is published by National Auto Research, a division of Hearst Business Media.

Also, prices for vocational trucks dipped after having been rock solid for a year, he said. “But they had to drop a little bit. You have to have depreciation. If you don’t have depreciation, you don’t have new equipment.”