J.D. Power states in the auction space the volume of 4-7 year-old trucks sold last month pulled back to typical levels after the massive surge in September. Trades and bankruptcy liquidations may have relaxed this month, although there may have been more trucks unsold. In any case, the J.D. Power states the market decided pricing is low enough for the time being.
- Model year 2016: $33,931 average; $1,046 (3.2 percent) higher than September
- Model year 2015: $24,171 average; $1,764 (6.8 percent) lower than September
- Model year 2014: $21,622 average; $259 (1.2 percent) higher than September
- Model year 2013: $19,941 average; $2,888 (16.9 percent) higher than September
- Model year 2012: $16,580 average; $3,495 (26.7 percent) higher than September
- Model year 2011: $14,843 average; $3,379 (29.5 percent) higher than September
In the first ten months of 2019, J.D. Power says its benchmark group of 4- to 6 year-old trucks brought 10.7 percent less money than in the same period of 2018. But, the company adds this year’s average is heavily skewed by market strength early in the year. Narrowing the comparison to September-October 2019 vs. September-October 2018, the variance increases to 26.8 percent.
“Average monthly depreciation for 4- to 6 year-old trucks has stabilized at 3.8 percent. In the same period of last year, there had been essentially no depreciation,” the company says.
The price story wasn’t quite as strong in the retail space, where J.D. Power reports selling prices continue to decline.
“Low-mileage trucks are still bringing fairly strong money, but the definition of ‘low mileage’ continues to revise downwards,” J.D. Power states. “The freight environment remains fairly strong, albeit cooler than last year’s superheated environment. The upcoming holiday shipping season should help limit the acceleration of devaluation.”
The average sleeper tractor retailed in October was 72 months old, had 462,703 miles, and brought $50,581. Compared to September, the average sleeper was three months older, had 5,592 (1.2 percent) more miles, and brought $1,668 (3.2 percent) less money. Compared to October 2018, this average sleeper was 5 months older, had 3,600 (0.8 percent) fewer miles, and brought $6,101 (10.8 percent) less money, J.D. Power says.
- Model year 2018: $100,469; $11,338 (10.1 percent) lower than September
- Model year 2017: $74,376; $5,646 (7.1 percent) lower than September
- Model year 2016: $58,782; $3,441 (5.5 percent) lower than September
- Model year 2015: $46,415; $928 (6.6 percent) higher than September
J.D. Power says year over year late-model trucks sold in the first ten months of 2019 brought an average of 6.6 percent more money than in the same period of 2018. However, this positive result is due entirely to market strength in the first half of the year. Again, by narrowing the focus to September-October 2019 vs. September-October 2018, 2019 is actually running 5.1 percent behind.
Depreciation rates also are on the rise, 1.8 percent for the first ten months of 2019 compared to 1 percent in 2018, while sales per dealership rooftop last month slipped to 3.8 trucks. J.D. Power adds dealers are selling an average of 10.2 percent fewer trucks in 2019 compared to the same period of 2018.
“Headwinds are starting to become stronger. The consumer side of the economy is still doing amazingly well, but consumer sentiment and behavior can change on a dime,” J.D. Power says. “When economists make predictions, they look at the manufacturing and industrial sectors as leading indicators. Those sectors have pulled back notably from a few quarters ago. The tariff war is still the main unforced risk to continued growth, and next year we can add the Presidential election to the mix.”
As for the medium-duty market, the average price in October for Class 3-4 cabovers was $11,741, which was $6,270 (34.8 percent) lower than September, and $2,104 (15.2 percent) lower than October 2018. Class 4 conventionals averaged $18,680 in October. This number was $3,332 (15.1 percent) lower than September, but $785 (4.4 percent) higher than October 2018. Class 6 conventionals, however, had a strong month, with average pricing increasing despite a much greater number of trucks sold. In October, the group averaged $21,534, which is $2,528 (13.3 percent) higher than September, and $2,115 (10.9 percent) higher than October 2018.
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