Truckers reeling from sticker shock when shopping for new trucks aren’t finding much relief in the used truck market, according to ACT Research.
“It’s a great time to be a used truck dealer,” said Steve Tam, vice president for the commercial vehicle sector at the Columbus, Ind.-based market research firm.
The average retail price of a used Class 8 tractor was 16 percent higher in April than a year ago, reaching $51,217, ACT said in its latest state of the industry report.
In comparison, retail prices for new Class 8 tractors are as high as $120,000.
Higher prices for used equipment constitute another cap on the potential expansion of truck capacity, which remains tight, putting pressure on trucking rates.
Net orders for new heavy-duty truck orders hit their lowest level since 2010 in April, continuing a decline that began in January after strong sales in 2011.
The average used truck retail price shot up 8 percent from March to April, after falling 7 percent in March thanks to an influx of older, lower-priced trucks.
“In March a large group of older trucks entered the market and dragged things down,” said Tam, dropping the average retail price of a Class 8 tractor to $47,576.
“Someone cleaned house of old equipment,” he said. “We’ve been screaming for (used truck) volumes, and we had a meaningful uptick in volume in March.”
With demand for trucks high, that uptick didn’t last long. From the retail to the wholesale auction level, resellers are struggling to find used equipment, Tam said.
Since the recession, truckers have held onto aging equipment longer, driving the average age of the U.S. heavy-duty truck up to about seven years.
Trucks that would have been traded in after three years and sold on the used truck market are now much older, and “closer to worthless,” Leathers said.
The number of available used trucks in good condition therefore is smaller than in previous cycles, which most likely is a factor in rising used truck prices.
“We didn’t build many trucks (in 2009) to start with,” Tam said, which is a major factor why “lightly used,” well-maintained used trucks are hard to find in 2012.
“We’re reaping the consequence of that lower new truck production,” he said. Tam expects used truck prices to keep rising, but at a slower pace than in April.
“There is late-model, low-mileage equipment out there in the market,” Tam said. “But those trucks get snapped up fast, and for a lot more than $50,000.”