Determining trade-in value, Part II: Impact of new truck sales

Bill Headshot
Updated Mar 12, 2020
Trade-in part 2-700×400-min

Lead Art For Part 2 Of Determining Used Truck Values

During recent years when order boards for new trucks were a year or more out and parts to assemble them were running short because of such high demand for new heavy-duty equipment, it was certainly a reason for the industry to celebrate.

However, the new truck sales boon eventually left many dealers’ used truck departments with an overabundance of used trucks and depressed market prices.

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“It’s affected the market immensely, especially the over-the-road sleeper market because so many fleets bought new large sleepers in the last three or four years,” says Chris Miranti, used truck director, Kyrish Truck Centers. The market was flooded with three- and four-year-old trucks being traded in, driving down prices by $10,000 to $20,000.

“Then you get prices being driven down on older trucks with the same miles because if you have a 2015 model with 400,000 miles, a ‘13 or ‘14 model with the same amount of miles are … being affected as well,” Miranti says. “It’s a chain reaction all the way down the line. It’s driven down prices to a large degree.”

Justin Candea, sales director, Young Truck Sales, says when all those new trucks were being sold, 60 to 70 percent of those sales involved trade-ins.

“That basically saturated the market and the used market values dropped considerably,” Candea says. “We’re still trying to give a good value on the used trucks but we have to be cognizant of how the market is right now.”

The laws of supply and demand aside, Trey Golden, vice president, used truck sales, Rush Enterprises, views the effect of new truck sales from a different angle — that being when the dealership actually takes possession of the trade-in.

“The further out the order board is, obviously the further out into the future we have to forecast trucks. It’s actually easier to appraise trucks when the market is down because the order board is shorter,” Golden says.

“I can tell you better what a truck is going to be worth [two months out] if that’s where the order board is, then I can in December. When factory order boards get out to be a year or more, it can be very challenging to say what that truck is going to be worth in a year,” Golden says. “Ninety to 120 days, we feel very comfortable with that.”

Clearly, determining the right amount to offer for a trade-in is not an exact science. However, by having guidelines and procedures in place and avoiding certain pitfalls, dealers can better navigate the current used truck and trailer market.

To read Part I of Trucks, Parts, Service’s coverage, CLICK HERE.

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