In the auction space, J.D. Power states a large influx in 2013 and 2014 model year (MY) trucks being sold — possibly do to an uptick in sudden fleet bankruptcies and liquidations — led to generally lower prices across the company’s benchmark model.
- Model year 2016: $32,225 average; $14,275 (31.4 percent) lower than July
- Model year 2015: $26,500 average; $300 (1.1 percent) lower than July
- Model year 2014: $21,275 average; $2,975 (12.2 percent) lower than July
- Model year 2013: $18,500 average; $600 (3.4 percent) higher than July
- Model year 2012: $14,825 average; $675 (4.4 percent) lower than July
- Model year 2011: $12,075 average; $2,925 (19.5 percent) lower than July
J.D. Power adds in the first eight months of 2019, 4- to 6-year-old examples of its benchmark model brought 6.8 percent less money than in the same period of 2018. Monthly depreciation for 4- to 6-year-old trucks is averaging 2.5 percent, in line with expectations.
“We expect conditions to remain similar in upcoming months, with demand fair to good but not enough to absorb a very substantial supply of incoming trucks,” J.D. Power says.
The story wasn’t much better in the retail channel, where depreciation also accelerated, though not at the rate found in the auction space. But J.D. Power adds pricing is only part of the story.
“The underlying story is used truck inventory,” the company says. “Since mid-year, strong new truck deliveries have resulted in a supply of trades that simply saturated the market. Numerous bankruptcies of smaller fleets have probably mildly exacerbated the situation. The demand side is still somewhat healthy, with the freight environment cooler than last year but still respectable. Buyers are taking advantage of ample inventory to cherry-pick the lowest-mileage trucks.”
J.D. Power reports the average sleeper tractor retailed in August was 70 months old, had 442,495 miles, and brought $54,690. Compared to July, the average sleeper was one month newer, had 22,159 (4.7 percent) fewer miles, and brought $17 (0.0 percent) more money. Compared to August 2018, this average sleeper was 1 month older, had 9,666 (2.1 percent) fewer miles, and brought $1,057 (2.0 percent) more money.
Looking at 2- to 5-year-old units, J.D. Power reports July’s average pricing was as follows:
- Model year 2018: $108,315; $712 (0.7 percent) higher than July
- Model year 2017: $82,107; $1,853 (2.2 percent) lower than July
- Model year 2016: $65,328; $1,255 (1.9 percent) lower than July
- Model year 2015: $48,691; $4,246 (8.0 percent) lower than July
Overall, J.D. Power reports year-over-year, late-model trucks sold in the first eight months of 2019 brought 9.5 percent more money than in the same period of 2018, while depreciation in the first eight months of 2019 averaged 1.5 percent per month compared to 0.3 percent in the same period of 2018. Yet the company adds these “positive results are due entirely to market strength in the first half of the year. Conditions have changed to the point where a narrower year-over-year comparison — for example August 2019 vs. August 2018 — shows parity if not a negative result.”
In looking ahead, the company states, “We know now there was a degree of pull-ahead materials and goods buildup in July in advance of a predicted tariff increase. This pull-ahead activity helps explain the positive freight results and maybe even the pause in used truck depreciation we saw in July. This activity also means these same economic measures were probably back down closer to trend in August.”
In terms of used truck value forecasts, J.D. Power adds it is now are pulling its year-over-year retail estimates back slightly from 10 percent. The company says pricing in the auction channel will most likely end up at least 10 percent lower, but retail pricing defied gravity longer than expected. “Even though we expect retail depreciation to accelerate through the end of the year, we might not hit a full 10 percent decline year-over-year,” the company adds.
Finally, in the medium-duty space, average August pricing for Class 3-4 cabovers was $15,612. This figure was $822 (5.0 percent) lower than July, and $2,101 (15.6 percent) higher than August 2018. J.D. Power adds Class 4 trucks ended their three-month hot streak in August, averaging $20,026. This figure was $3,941 (16.4 percent) lower than July, and $1,249 (5.9 percent) lower than August 2018. Class 6 trucks also moved positive for a second month, averaging $25,325 in August. This figure was $264 (1.1 percent) higher than July, and $5,307 (26.6 percent) higher than August 2018.
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