June Used Class 8 Sales Little Changed From Last Year
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Used Class 8 truck sales in June came in at 21,500 units, equal to sales figures from the year-ago period, ACT Research reported.
The average retail sale price for a used truck fell 26.4% to $68,316 from $92,778 a year ago, and declined 1.1% month-over-month from $69,052 in May. On a month-to-month basis, sales grew 11.4% from 19,300. Average mileage increased 0.2% to 433,000 from 432,000 a year ago, and 1.6% from 426,000 in May. The average age declined 9%.
“Sales usually increase 4%-5% in June, so the increase was not unexpected in that regard,” ACT Research Vice President Steve Tam said. “However, in the context of the current freight market, and amid all the press regarding fleets going out of business, it may seem a little counterintuitive.”
Tam added that while there has been a net decline in the number of fleets with operating authority, fleets are both entering and exiting operation daily. He noted that churn is driving the better-than-expected sales volumes as well as more inventory being available.
[July State of the Industry: U.S. Classes 3-8 Used Trucks Update]
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“I’ve visited a lot of dealers in multiple states,” said Charles Smith, regional business development manager at Mission Financial Services Group Corp. “Foot traffic is still kind of slow. And, of course, the economy played a big role in that. But with truck prices being as low as they are, I see it as the bottom. We’re at the bottom right now, and it can only get better.”
Smith suspects the used truck market will start turning around in the third quarter or beginning of the fourth. He noted dealerships just need the foot traffic now that they have inventories.
“Frankly, with truck prices being down, we just need to get the consumer back out to buy,” Smith said. “The only thing that’s really hurting the market now is spot rates are still down, freight rates are still down. So, a lot of guys are not spending the money that they typically would.”
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Commercial Truck Trader reported that demand improved for used Class 8 trucks on its website. The online marketplace for new and used commercial vehicles tracks interest based on how actively people are looking into the specifics of different listings. It found vehicle detail page views were up 14.6% from May to June.
“I was frankly surprised at the rate of growth for used heavy-duty demand on Commercial Truck Trader, which grew substantially from May to June,” said Charles Bowles, director of strategic initiatives for Commercial Truck Trader. “Most used categories showed considerable growth, with heavy-duty dump and garbage trucks VDPs demonstrating strong demand.”
Bowles noted the top-viewed used heavy-duty vehicles by brand was Freightliner. That was followed by Kenworth, Peterbilt, Volvo, International and Mack.
“I mean, it feels like we’re getting closer to a bottoming-out process,” said Trey Golden, vice president of used truck sales at Rush Enterprises. “Pricing was declining all of last year, past that, and you’re starting to see numbers right now, depending on what they report, somewhere in the 30%-less-than-a-year-ago range in terms of pricing. And so, you’re starting to get some affordability.”
Golden noted the downturn primarily was driven by operating costs surpassing what truck drivers were able to make so they weren’t in a rush to replace equipment.
“Used truck prices are a little lower, so some costs are coming down,” Golden said. “Fuel has not been a problem here recently. So, there could be savings in there for used truck buyers a little bit. And then if you get just a little spike in rates, it could get things going again.”
Golden noted that rates have stabilized for the most part, so now he is keeping an eye on inventories. He also is watching the truck manufacturers, finance companies and leasing companies since they dictate the direction of the market more than the dealerships.
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“From a transportation perspective, we had a banner quarter again,” said Rob Slavin, senior pricing analyst at Ritchie Bros. Auctioneers, “both in trucks, trailers, just really numbers that we’ve only seen back in 2020 from a quantity standpoint that went through. The only difference is that we’re collecting a lot more today than we were back in 2020.”
Slavin noted the influx of equipment has been due to carriers downsizing their fleets because of a lack of freight demand in the marketplace. But he does note that sales also have been strong this year, adding that sales figures declined mildly from the first quarter. But both quarters, Slavin said, still got plenty of business.
“You have to take into consideration that there was still a drop, prices are still falling,” he said. “But from a strong standpoint, we’re seeing a lot of equipment. We’re seeing a lot of fleets de-fleeting because of the lack of freight that’s in the marketplace.”