Used Class 8 Truck Sales Dip in May Low-Mileage Models Remain Scarce

Demand for used heavy-duty trucks remained strong in May, but sales declined due to continued tight inventories of lower-mileage units, ACT Research reported.

Used-truck retailers, wholesalers and auctioneers surveyed by ACT sold 1,636 tractors in May, down from 1,951 in the same month a year ago, according to preliminary numbers provided by Steve Tam, vice president for the commercial vehicle sector.

The sales downturn has not been from a lack of demand, but rather a limited availability of desirable used trucks, Tam told Transport Topics.

“We’ve been screaming for inventory and just not getting it,” he said. “Everybody I talk to says, ‘I could sell more trucks.’ The demand is there.”

In fact, the average mileage of the used trucks sold in May was “the highest on record since we started collecting data in 1996,” Tam said.

The average mileage was about 560,000 miles, he said, compared with 533,000 in the same month a year ago.

May’s sales were also lower than the 1,680 units sold in April, according to ACT’s data, which represents about 8% to 10% of the market. A total of 8,757 trucks were sold in the first five months of this year, compared with 10,583 in the same period a year ago, Tam said.

Rick Clark, president of the Used Truck Association, told TT the used truck market is also suffering from a shortage of low-cost models.

“What’s in inventory is a lot of high-priced trucks, and the typical buyer in the past was a $25,000 to $40,000 purchaser,” he said. “The inventory coming back is $60,000 and up.”

Clark added that fleets “are keeping their trucks longer, and tonnage picked up last year so they’re running them harder and not trading them in right away,” he said.

The American Truck Dealers, a division of the National Automobile Dealers Association, also noted high mileage levels for used trucks.

Chris Visser, senior analyst for ATD/NADA, said the average mileage for used sleepers sold by retailers in April was 554,000. May numbers were not yet available.

That was the second-highest average mileage in the past four years behind February, when it was 556,000.

“We’re at a historically high level for mileage,” Visser said, who added that a year ago, the average mileage figure was 514,500.

In late 2009, at the beginning of the economic recovery, buyers “cherry picked” the lowest-mileage used tractors, which resulted in a pool of trucks available with higher mileage, Visser said.

Also, some fleets bought low-mileage used trucks “as a substitute for a new one,” he said.

Visser added the average used Class 8 sleeper sold in April was 74 months old, compared with 66 months at the end of 2009.

Dealers around the country backed up the findings of ACT and the trucking associations.

Dennis Frankie, sales manager at Fyda Freightliner’s used trucks location near Dunningsville, Pa., south of Pittsburgh, said the average used truck on the lot has accumulated about 550,000 to 600,000 miles.

“Trying to find low-mileage equipment is hard right now,” he said.

Still, demand for used trucks remains high, he said.

“The new trucks now are getting pricey with the new emissions [standards],” Frankie said. “Everyone’s looking for used trucks now.”

Tom Phillips, used truck manager at Vanguard Truck Centers’ Phoenix and Tucson, Ariz., locations, said the availability of lower mileage units has been fluctuating. The dealership’s low-mileage used inventory is “really good at times,” but at other times the trucks all have more than 400,000 miles, he said.

Phillips said some customers have come from out of state to look at low-mileage trucks.

California-based companies are upgrading their equipment because of state and port emissions regulations, he said.

Other companies, though, are still holding on to their current trucks. “If they don’t have to buy new equipment, they’re not,” he said.

Steve Crouse, used truck manager for Rush Truck Centers in three Florida cities, said companies have been trading in trucks they ran 100,000 to 200,000 miles longer than normal.

He also said demand is high for low-cost used trucks at his dealerships in Orlando, Jacksonville and Haines City.

“Everybody wants $40,000 and down,” he said.

Crouse estimated that used truck sales at his locations have climbed 10-15% in the first five months of 2012 from a year ago.

“Housing’s starting to come back. We’re seeing some construction,” he said.

Despite having higher mileage, used trucks are selling at higher prices than a year ago, research firms found.

Tam, of ACT Research, said the average sales price for a used truck in May was $41,189, down from the previous month but 2% higher than May 2011. The average price is based on retail, wholesale and auction prices, he said.

Tam said he expects prices to continue to increase year-over-year for the rest of 2012.

ATD found that the average retail price for a sleeper in April was $48,800, compared with $44,100 a year earlier, Visser said.