Rising demand coupled with a growing shortage of late-model, low-mileage units continues to push up used Class 8 tractor prices, according to data tracked by ACT Research Co. However, the firm noted that the heady rise in pricing may be starting to level off.
Steve Tam, vp-commercial vehicle sector with ACT, told Fleet Owner that the average price for used Class 8 units sold increased 4% month-over-month in October, with the average up 35% since the early part of the third quarter in 2009.
However, the volume of used Class 8 sales is slowing as the supply of desired models gets snapped up, with sales volume declining 16% month-over-month in October.
“We are already seeing a shortage of desirable equipment in the used [Class 8] market and we’re still only at the beginning of this trend,” Tam said. “And we’re going to be dealing with this shortage for at least the next couple of years.”
Steve Clough, president of national used truck dealership chain Arrow Truck Sales, said at FTR Associates’ 2010 Transportation Conference in September that the used truck shortage is due to the record low production rates of new trucks experienced during the past few years.
He pointed out that new truck production slipped from 133,000 units in 2008 to 95,000 units in 2009 and is expected to finish out 2010 with only around 110,000 units – not enough to restock the used truck market significantly.
Combining that atypical spike in demand with low new truck production rates from 2007 to 2009 – volumes that feed the used truck market three and four years out – means used truck supplies will be short for a significant amount of time, Clough said.
Still, ACT’s Tam stressed that the used truck shortage has some benefits, too – especially in terms of boosting trade-in values.
“Prior to 2010, there were just too many trucks on the market and truckers could not get good money for their equipment,” he said. “Now we’re seeing trade-in values – right alongside used truck prices – climbing back and that will help support new truck sales as those higher trade-in values will help lower the overall transaction price for new equipment.”