J.D. Power says the volume of 4- to 7 year-old trucks sold at auction increased notably in December while pricing was markedly lower on average — shining a light on the market’s continuing volatility.
Among the most popular model years in the auction space:
- Model year 2016: $27,051 average; $3,699 (12.0 percent) lower than November
- Model year 2015: $23,697 average; $3,246 (12.0 percent) lower than November
- Model year 2014: $19,376 average; $1,990 (9.3 percent) lower than November
- Model year 2013: $15,954 average; $1,212 (7.1 percent) lower than November
- Model year 2012: $13,559 average; $2,391 (15.0 percent) lower than November
- Model year 2011: $12,667 average; $3,417 (36.9 percent) higher than November
The company says during 2019 4- to 6 year-old trucks brought 14.0 percent less money than in 2018. When narrowed to the final two months, the variance increases to 30.8 percent. Monthly depreciation for 4- to 6 year-old trucks averaged 3.5 percent in 2019 while in 2018 there was essentially no depreciation. Pricing for late-model trucks is now roughly 10 percent lower than the last market bottom in 2016, the company says.
J.D. Power also notes December is typically a high-volume month, as fleets and dealers look to remove unused trucks and excess inventory from the books. However, this December’s increase over November was greater than expected. In addition to these factors, the greatly increased number of fleet bankruptcies in 2019 is not helping.
J.D. Power says late-model trucks lost more value than expected in December. Sales volume of 3-year-old trucks increased notably, while the volume of 4- and 5-year-old trucks was in line with expectations. There were no anomalies in average mileage, spec, or model mix, so depreciation appears to be natural market movement, the company says.
The average sleeper tractor retailed in December was 71 months old, had 481,060 miles, and brought $47,311. Compared to November, the average sleeper was 5 months newer, had 4,447 (0.9 percent) fewer miles, and brought $1,549 (3.4 percent) more money. Compared to December 2018, this average sleeper was 2 months older, had 21,093 (4.6 percent) more miles, and brought $9,924 (17.3 percent) less money.
Among the popular 2- to 5-year-old truck cohort, December’s average pricing was as follows:
- Model year 2018: $92,225; $2,877 (3.0 percent) lower than November
- Model year 2017: $71,941; $2,943 (3.9 percent) lower than November
- Model year 2016: $56,074; $2,553 (4.4 percent) lower than November
- Model year 2015: $42,433; $2,761 (6.1 percent) lower than November
Year-over-year, late-model trucks sold in calendar year 2019 brought an average of 4.2 percent more money than in 2018, though J.D. Power notes a “full-year comparison is misleading since it doesn’t reflect the market shift in the second half of 2019.
“Narrowing our focus to the last two months of each year, 2019 came in 8.0 percent behind. Average monthly depreciation was 2.1 percent per month in 2019, compared to well under 1 percent in 2018. Pricing remains roughly on par with the last market bottom in 2016.”
The company also notes dealers retailed an average of 3.4 trucks per rooftop in December, identical to November’s 11-year low.
Conversely, the medium-duty market was a mixed bag last month but generally stronger than its heavy-duty counterpart.
The average price for Class 3-4 cabovers was $12,439, $444 (2.0 percent) higher than November, and $1,703 (15.9 percent) higher than December 2018. Class 4 conventionals averaged $17,673, $920 (4.9 percent) lower than November, and $1,458 (17.6 percent) lower than December 2018; Class 6 conventionals clocked in at $21,451, $1,100 (5.4 percent) higher than November, and $5,180 (31.8 percent) higher than an unusually low December 2018.
In looking ahead, J.D. Power states “anuary is typically a slow month for volume, “so we don’t expect much change in the market. One bright spot in 2020 will be fewer trade returns compared to 2019, but of course the industry still has a major surplus of trucks in inventory to work through. Industrial production will need to recover or at least stabilize for the used truck supply/demand relationship to improve noticeably.”
For more information, and to read the entirety of this month’s report, please CLICK HERE.
