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June 30, 2017 2:30 PM, EDT

Used Truck Volumes Up 35% in May; Pricing Stable as Dealerships Gain Sales

John Sommers II for TT

Used truck volumes rose 35% year-over-year in May amid stable pricing that led to gains in dealership sales, experts said.

Same-dealer sales were 3,474 compared with 2,576 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, and it includes about 13% of the total market, which is statistically enough to project market conditions, according to the company. By that measure, total sales in May rose to 26,723 compared with 19,830 a year earlier, ACT said.

That lifted year-to-date sales to 134,676 compared with 114,276 in the same period of 2016.

The used-truck market in May bypassed the start of the typical summer slowdown.

“I like it, love it, want more of it,” ACT Vice President Steve Tam told Transport Topics.

Equipment valuation is the key factor, Tam said. Prices have stabilized “while people who were out of the game are back in the game and looking to sell or buy.”

The average price of a Class 8 vehicle was $40,600, down 8% compared with $44,300 a year earlier; May’s price was flat compared with April.

“We are trimming that [year-over-year] gap as we go forward,” Tam said, noting normal depreciation of the average Class 8 has been running about 15% a year.

While May’s average price is not a gain, “certainly prices are not falling as much as one might expect for a full year,” he said.

The average Class 8 had 454,000 miles on it compared with 459,000 a year earlier, according to ACT.

With that mileage a buyer “could easily go into a regional haul application and run reasonably assured that you are not going to be sitting on the side of the road waiting for a tow truck, especially if it is a well-maintained truck,” Tam said.

The average age was 7 years and 2 months. That was down from 7 years and 4 months a year earlier.

Chris Visser, senior analyst for commercial trucks at J.D. Power Valuation Services, noted that May was a strong month for sales per dealership.

“In fact, May’s result of 5.8 trucks per rooftop was the strongest since October of 2014,” Visser wrote in a report. He added auction activity was slow in May.

“We continue to view the auction market as firming up as pricing finds its low point,” Viser said.

At the Ritchie Bros. equipment auction in Houston on June 21, more than 320 Class 8 vehicles were sold with prices ranging from a high of $95,000 to a low of $3,000. The median price was $11,000, the company said.

Top money went to a 2016 Peterbilt 389 sleeper truck tractor, the company said. Its features included a Cummins ISX15 550 horsepower engine, an Eaton Fuller 18-speed manual transmission and a 64-inch mid-roof sleeper plus aluminum wheels. Mileage on the odometer was 235,179.

Also, Vancouver, B.C.-based Ritchie Bros. sold 49 heavy-duty dump trucks ranging in price from $110,000 to a low of $2,000; the median price in Houston was $18,000.

The top seller among those trucks was a 2015 Kenworth T440 with a Paccar PX9, 370-horsepower engine and 73,489 miles, it said.

Peterbilt Motors Co. and Kenworth Truck Co. are brands of Paccar Inc.

Also, Daimler Trucks North America’s engine in its Freightliner brand is doing well. “It’s gotten so that for the Freightliner with the DD15 engine, the DD15 engine generally is the preferred engine in the Freightliner product over the Cummins [ISX] engine,” Steve Clough, president of Arrow Truck Sales Inc., said during a conference call hosted by Stifel, Nicolaus & Co.

Arrow Truck Sales, founded in 1950, sells preowned medium and heavy duty trucks in North America.