After the Great Recession the cost of used trucks has reached its maximum. Why is this happening?
J.D. Power Valuation Services reported that truck prices in most segments rose in May, while the auction price of Class 8 was up 11.9% over April. Retail prices were up 7.1% from the previous month.
That was influenced by both demand and supply.
“On the supply side, ongoing new truck production constraints are causing many buyers to look for low-mileage used trucks as a substitute,” Chris Visser, J.D. Power Valuation Services commercial vehicles senior analyst and product manager, told FreightWaves. “On the demand side, the freight markets are still red-hot, encouraging truckers to upgrade to newer iron.”
According to Visser, prices for the newest available sleeper trucks are bringing pricing at or above the highest peak months in the post-Great Recession period.
The average sleeper tractor retailed in May was 71 months old, had 416,232 miles and brought $63,518. Compared to May 2020, this average sleeper was four months older, had 45,606, or 9.9% fewer miles, and brought $23,285 or 57.9% more money.
“We expect late-model pricing in June to clearly surpass the highest months in the post-Great Recession period,” Visser said. “In times like this it’s easier to justify the expense of a newer truck if it means better reliability and fuel economy and possibly a warranty.”
Dealers sold an average of 5.2 trucks per store in May, 0.4 fewer than in April. Year over year, the first five months of 2021 generated 1.6 more truck sales per dealership than during the same period of 2020.
Visser expects most trucks will see a rise in retail value in the third quarter and that trucks will become more available.