The first heavy auction month of 2018 in February shows the used truck market operating as expected, J.D. Power writes this week in its March Commercial Truck Guidelines market report.
Looking first at the auction market, J.D. Power notes February’s auction scale picked up precipitously over January and offers a “useful insight on how the new year is shaping up.” Volume rebounded after a slow start to the year, and an influx of 2014 model year trucks shows the five-year-old auction market is growing.
J.D. Power’s benchmark model says model year (MY) 2013 tractors averaged $30,250, $1,450 (4.6 percent) lower than January; MY 2012 tractors averaged $25,000, $1,500 (5.7 percent) lower than January; MY 2012 tractors averaged $17,000, $250 (1.5 percent) lower than January. The company states those totals far exceed the prices from the first two months last year — by 21.7 percent overall — but that expected increases in supply during the calendar year will likely still be depreciation near J.D. Power’s 2 percent monthly estimate.
Prices were up across the board in the retail sleeper market. The average sleeper retailing in January had 458,697 miles, brought $51,254. Compared to December, J.D. Power states that average sleeper was four months older, had 26,772 (6.2 percent) more miles and brought $3,924 (8.3 percent) more money. And when compared to the same period in 2017, that average sleeper was two months newer, had 6,936 (1.5 percent) more miles are brought $3,905 (8.2 percent) more money.
“Trucks of most age cohorts were up firmly compared to the same period of last year,” J.D. Power states.
Among the most popular three- to five-year-old cohort, J.D. Power states average prices last month were as follows:
- MY 2016: $90,645, $4,036 higher (4.7 percent) than December
- MY 2015: $66,604, $3,678 lower (5.2 percent) than December
- MY 2014: $55,565 $1,574 higher (2.9 percent) than December
On a year-over-year basis, late-model trucks sold in January averaged 7.6 percent higher than January 2017.
Movement across vehicle models was minimal in January, though J.D. Power states sales per rooftop slipped from 4.7 to 4.5. “January is typically unpredictable, with buyers starting to look for equipment but weather potential impacting activity,” J.D. Power writes. “We expect sales to increase moderately in 2018 in step with improving economic conditions.”
Looking farther into the long term, J.D. Power adds that February’s booming new truck order totals means that 2018 “should see an elevated volume of deliveries. Fleets are taking advantage of tax breaks and incentives and appear optimist about economic conditions in 2018.”
Turning finally to the medium-duty space, most average selling prices were well ahead of the previous month, though J.D. Power states “as of January we are considering trucks one model year older than December, so month-over-month comparisons will be more meaningful next month.”
Volume for Class 3-4 cabovers and Class 4 and Class 6 tractors were down across the board in January — cabover volume was weakest — which allowed for higher prices in each segment. Class 4 trucks averaged $23,524, $3,281 higher (16.2 percent) than January 2017; Class 6 trucks averaged $24,349, $2,402 higher (11 percent) than January 2017. J.D. Power adds that Class 6 units generally brought “quite a bit more money in January than any month of 2017,” and appears to have the most opportunity to recover after last year’s weak totals.
Overall, J.D. Power states its yearly outlook remains unchanged, “with depreciation averaging roughly 2 percent per month. By the time you this report, the expected increase in used truck supply should be noticeable.”
For more information, and to read the entirety of this month’s report, please CLICK HERE.