Used-truck prices fell in Q3, except for heavy-duty at auction

Oct. 27, 2014

At the end of Q3, used-truck prices at auction were up from Q2 for heavy- duty units, but down for medium-duties, according to the Truck Blue Book (TBB) report on the used-truck market for September. TBB also found that on the private market, prices declined slightly for medium-duty trucks while those for heavy-duty dropped off more— by 2.5%-- by the quarter’s close.

Used-truck volume during Q3 rose “significantly” for the private market but the level for heavy-duty auction sales wound up as “relatively stagnant,” the report’s author Jessica Carr, TBB associate analyst-- commercial trucks, told FleetOwner.

As for used-truck activity specific to September, Carr said that the only prices for used trucks that declined were those of heavy-duty trucks sold on the private market, which fell 6.3%. On the other hand, she advised that heavy-duty auction prices increased “significantly” —by 26%-- “especially given the drop seen in those for August.” Meanwhile, medium-duty units enjoyed a significant price rise at auction last month.

“The decline in the private market was a result of a 6.3% decrease on heavy- duty trucks with a 7.5% volume increase and a 0.8% drop in medium-duty prices with volume jumping significantly,” explained Carr. “Despite the minimal change on medium duty, the decrease on heavy duty caused the overall average price for the private market to drop 8% due to the heavy-duty trucks holding 76% of the current marketplace.

Carr pointed out that while heavy-duty volume was up from August, the medium-duty market saw an even stronger month in sales. She said that for used trucks in the U.S. spanning model years 2004-2014 and having run less than 1-million miles, average asking prices decreased between August and September—“bringing heavy-duty back down closer to July prices.”

On the other hand, TBB found that medium-duty volume “showed another positive change” last month as there were increases recorded in August that that continued into September. “The private market saw another large increase-- bringing Q3 medium- duty volume higher than it has been since Q1,” remarked Carr.

But while the number of heavy-duty trucks on the private market was up during September, that was not enough to compensate for the drop recorded last month by TBB. “April and May saw the lowest heavy-duty volume this year, with a much stronger trend so far in the second half of 2014,” Carr noted. “If Q4 2014 trends hold close to 2013, there is anticipation of these large numbers staying until the end of the year.”

Carr described the overall price trend as “relatively stagnant between August and September for medium-duty used trucks on the private market, but down for heavy-duty units.” She said that due to the drop in prices during the past month, Q3 heavy-duty asking prices averaged 2.5% below those of Q2.

According to TBB, the model year that saw the largest price decrease between both heavy- and medium-duty was 2014. “This was expected,” Carr explained, “since these are now entering the used market with more mileage and at a higher volume than before.”

Meanwhile, “2013s saw a small increase followed by a decrease in years 2012-2009,” she continued. “A few of the older model years saw increases, such as the 2004 and 2005 models. The largest increase among the models was for the 2004s. Heavy-duty trucks alone saw more of a price increase on individual model years. Both 2013 and 2014 models saw increases over 1%. The largest heavy- duty price increase was for the 2008 model.”  Most of the overall model-year price drop was due to what happened with medium-duty trucks.

“Looking at heavy-duty trucks alone,” advised Carr, “there was a drop in both 2013 and 2014 models with increases in the older years such as 2007-2004. This had a large impact on the overall drop in price for the heavy-duty private market average for September.

“As a larger amount of older models enter the market and less of the new models are remaining for sale,” she continued, “the average prices are driven much more heavily on these older, lower-priced models.” TBB also found that 82% of the heavy duty used trucks fall between years 2012 and 2007. “That is not much lower than what was seen in August,” Carr observed, “but the 2006-2004 models are up 5% in overall volume within the market.”

Other highlights of the TBB report specific to September include:

  • As heavy-duty volume increased last month, the number of older models grew the most.  A large increase in 2004 sleeper-equipped  trucks was seen as the 2014 volume drop hit those harder than non-sleepers-- 76% of the 2014 models are non-sleepers “since people will tend to get more use out of sleeper tractors before selling on the used market”
  • Along with the overall drop in heavy-duty asking prices, each of the top makes saw price decreases. The largest drop was for International at 9.6% which came after a large increase during August. The smallest increase for August was on Kenworth trucks with a 3.0% increase. During September, those saw the smallest change-- again at a 4.4% drop-- identical to the Mack change. Both Freightliner and Peterbilt saw 5.6% decreases
  • The medium-duty market incurred a 0.8% price decrease on the private market, but prices gained by 22.7% at auction throughout September. There were advertised price decreases for most of the medium-duty model years—“but there were enough increases to keep the overall change to a minimum”
  • Among the top four most popular Class 4-6 trucks on the private resale market, the largest decrease in price was for Hino for the third month in a row. During August, Hino trucks dropped 7.2% and September brought on another 5.8% drop. Dodge also saw a decrease in price at 2.4% last month. In August, Ford dropped 4.6% but September’s 4.3% increase “almost fully compensated for that.” The highest volume among these trucks was for International, as usual. Even though International units had a 4.1% uptick in pricing, there was a 46% increase in volume for those trucks
  • Prices decreased in almost all regions on the private market during September compared to August. But the dip in auction prices recorded over the past few months was made up in September as prices for both heavy- and medium-duty units rose across the regions

To view TBB's full September report, click here.

Truck Blue Book is a Penton media property and thus a sister operation to FleetOwner.

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