New Life for Used Trucks

Motor carriers that want trucks out of their yards and off their books are starting to go where America sells practically anything: eBay.

The Web auction site is becoming a sales channel for companies trimming capacity as well as a tool for truck dealers and owners unloading unwanted equipment.

It’s also a new source of capacity for businesses looking to buy trucks. And yes, people are buying, resellers say.

“I would typify the (used truck) market as not being in a bad place,” said Steve Tam, vice president for the commercial vehicle sector at ACT Research in Columbus, Ind. After months of steady decline, the value of used trucks increased in June, Tam said.

But used-truck prices are as much as 30 percent lower than they were two years ago, he said, before the recession forced carriers to shed hundreds of thousands of rigs, sending many of them to used-truck lots.

Many larger motor carriers have delayed capital spending plans as they shrink their fleets. But used trucks are beginning to look better to businesses buying small numbers of trucks and shopping for bargains — owner-operators as well as small carriers and shippers.

More than 2,000 trucks were for sale on eBay Motors late last month, with bids starting as low as $1,600, although most starting bids ranged between $5,000 and $20,000.

Penske Truck Leasing is plugging into the auction site with plans to sell all types of used trucks, utility vehicles, buses and sedans through eBay Motors. It’s starting out small, but plans to expand its own eBay store.

“It’s a unique way to find new buyers,” said Jack Mitchell, vice president of remarketing at the $4 billion transportation leasing and services company. “What drew us to eBay is there is no better way to get visibility. eBay Motors gets 13 million visitors a month.”

Penske, which leases or rents 200,000 vehicles and sells about 25,000 used vehicles a year, launched its eBay store last month as part of a strategy to expand sales beyond wholesale buyers and truck maker dealerships.

“We want people to know they can buy direct through Penske,” Mitchell said. On Penske’s eBay store last month, a 2005 Freightliner M2 24-foot straight truck with 217,336 miles was up for auction with bids starting at $8,000.

All the equipment on eBay will be auctioned, Mitchell said, although Penske may test eBay’s “Buy It Now” feature.

Penske also sells trucks directly to customers through its own online store, www.penskeusedtrucks.com, where prices for a 2005 Freightliner M2 start at about $18,000 and range up to about $32,000, depending on various factors.

Mitchell hasn’t seen a big dip in Penske’s used-vehicle sales, despite the recession and the glut of available equipment. “We’ve sold almost 10,000 vehicles through July, and that’s almost where we were a year ago,” he said.

Arrow Truck Sales, a Volvo subsidiary and leading U.S. truck reseller, had a good July, said Marty Crawford, a sales executive with the Kansas City, Mo.-based company’s branch in Conley, Ga. “The retail side and wholesale side are starting to pick up, which indicates that capacity and demand are getting a little more in line,” he said.

Crawford, who is also president of the Used Truck Association, sees more purchasing activity downstream of major carriers. “A lot of companies don’t want to invest the capital to increase fleet size, so they’re hiring owner-operators, and owner-operators are buying used trucks,” he said.

Some carriers that don’t want to buy new equipment because of its higher price — which will rise even more when 2010-model-year trucks equipped with next-generation emissions controls roll out — are buying used vehicles, he said.

“Cash is king right now, and people are very conservative about spending on fleet assets,” Crawford said.

He believes demand for used trucks will increase with growing freight volume. “I think our side of the business is going to be strong for the next couple of years,” Crawford said.

Prices could drop further, however, if a large number of additional used trucks enters the market. “There’s no one who can tell us how many used trucks are sitting in inventory right now,” Tam said. “And the trucking companies that went out of business — where are their trucks? We’ve taken them out of capacity in terms of competing for freight, but they’re not in the used-truck arena yet.”  

Contact William B. Cassidy at wcassidy@joc.com.