“Having come through a strong Q1,” the commercial truck industry is optimistic for the remainder of 2014,” contends the latest “Commercial Truck Monthly Report” on the vehicle- resale market released by The Truck Blue Book (TBB).
TBB found that “prices for used medium- and heavy-duty trucks normalized throughout Q1, leaving them prime to rise in Q2.”
“Medium-duty truck prices rose 1.8% in March, while heavy-duty truck prices fell 1.7%,” report author Jessica Carr, TBB’s associate analyst-- commercial trucks, told FleetOwner.
She also pointed out that “regional prices remained static-- with the exception of the Southeast, which saw prices increase 3%, and the Northeast, which saw prices fall 7%.”
In addition, Carr determined that, in March, “demand for newer mode- year trucks skyrocketed with prices increasing for those in the 2011-2013 model year range.”
The TBB report also reveals that asking prices were down for March, ending Q1 with higher prices and slightly lower volume than recorded for Q4 of 2013.
Carr pointed out that “both prices and volume are up year over year, showing a promising future for 2014.”
Meanwhile, she noted that Q1 was slow for the auction market, which allowed for “much variability in pricing.”
Turning back to those later-model trucks, Carr advised unequivocally that “High-quality, used commercial trucks are in demand! This first quarter saw the lowest number of trucks on the medium- and heavy- duty markets since the first quarter of 2013.
“Volume fell in Q1 in comparison to Q4 of last year,” she continued. “Even though volume is down, it is higher than Q1 ended in 2013.”
Carr related that the highest overall prices for March were within the western region, which was also the case in both January and February.
“The 2013 MYs ended Q1 with lower average prices than 2012s due to the larger number of models entering the used market and competition with new 2014s as well,” Carr explained.
“As the older trucks age,” she continued “the quarter-to-quarter depreciation begins to level out while more models that are new enter the market. That allows for an overall increase in average prices, as seen in Q1.”
Carr made these additional points regarding model-year pricing:
- Driven by increased demand to replace fleets with new or low-mileage used trucks, overall model-year prices increased in Q1
- Volume for trucks 2009 and newer more than doubled in Q1 than Q1 of 2013, allowing for more high-priced trucks to bring the average up
- On average however, the prices between 2013 and 2014 were down for most model-year trucks
- As the volume increased, the prices had to drop. The 2013s that were on the market last year will have a lower average mileage and usage than a 2013 sold this year-- thus bringing values down again
- The highest priced MY for Q1 was the 2013-- despite the number of 2014s that have entered the used market
- The 2014s are still being sold new, thus a lower price is the only incentive to buy used.
- As always, there was a significant drop in price between MY2008 and 2007 before prices increased on 2006s, due to the high volume and low demand for 2007s
- Month over month, average asking prices rose throughout the entire quarter; there was an overall increase in truck prices highly driven by the 12% increase in 2014s
- 2013s only rose 2% before a declining trend for MYs 2012-2009
To view TBB's complete March report, click here.