Used truck supply should continue to decline from a high level, slowed by ongoing fleet bankruptcies, and freight volumes should stabilize as the industry adjusts to changes in demand patterns. Despite all the uncertainty, there’s more positive than negative pressure on used truck values, J.D. Power reported this week in its August 2020 Commercial Truck Guidelines industry report.
J.D. Power says volume returned to a typical level in July after June’s substantial increase. Fewer auctions were held in July, and June benefited from pent-up demand. Encouragingly, pricing for almost all model years of the benchmark model tracked was stronger than June.
Average auction prices were as follows:
- Model year (MY) 2017: $36,831 average; $4,640 (14.4 percent) higher than June
- MY 2016: $29,540 average; $2,227 (8.2 percent) higher than June
- MY 2015: $26,062 average; $4,154 (19.0 percent) higher than June
- MY 2014: $19,367 average; $3,459 (21.7 percent) higher than June
- MY 2013: $10,475 average; $3,568 (25.4 percent) lower than June
Month-over-month, J.D. Power says its benchmark group of 4-6 year-old trucks brought 13.5 percent more money. In the first 7 months of 2020, pricing averaged 21.5 percent lower than the same period of 2019. On a positive note, July’s average is the highest in 12 months. Freight data continues to improve, with some sectors fully recovered and others still slowly recovering. At least in the short term, this trend should support pricing.
“Retail volume increased again in July, with packages of higher-mileage trucks contributing to the volume and causing some of our averages to come in lower than last month,” J.D. Power reports.
The average sleeper tractor retailed in July was 68 months old, had 478,624 miles and brought $39,650. Compared with June, this average sleeper was identical in age, had 374 (0.1 percent) more miles and brought $2,677 (7.2 percent) more money. Compared with July 2019, this average sleeper was three months newer, had 13,970 (3 percent) more miles and brought $15,023 (27.5 percent) less money, J.D. Power reports.
July’s average pricing for trucks two to five years of age, was as follows:
- MY 2019: $87,799; $6,328 (6.7 percent) lower than June
- MY 2018: $74,637; $4,829 (6.9 percent) higher than June
- MY 2017: $49,596; $4,417 (8.2 percent) lower than June
- MY 2016: $38,169; $568 (1.5 percent) higher than June
J.D. Power says its average for model year 2019 was impacted by a large number of high-mileage trucks sold, while the average for model year 2017 was impacted by a large package of low-spec trucks. Conditions were better than those figures suggest.
Month-over-month, late-model trucks brought 0.6 percent less money. In the first seven months of 2020, pricing averaged 15.8 percent lower than the same period of 2019. Depreciation in 2020 is averaging 2.8 percent per month, back down below 3 percent and not far from what J.D. Power says it considers historically typical.
Dealers retailed an average of 5.2 trucks per rooftop in July, 0.6 truck higher than June, and 0.3 truck higher than last July. This month’s result is another healthy uptick, and the first result over 5.0 since August of 2018, J.D. Power reports.
Medium duty sales volume was back down to typical levels except for Class 6 conventionals, which saw another uptick.
Starting with Class 3-4 cabovers, pricing and volume were notably lower than June. July’s average was $11,418, $2,167 (16.0 percent) lower than June, and $5,016 (30.5 percent) lower than July 2019. For Class 4 conventionals, average pricing was $19,690, $2,199 (10 percent) lower than June, and $3,686 (15.8 percent) lower than July 2019. Class 6 conventional pricing averaged $21,854 in July, $834 (4 percent) higher than June, and $3,117 (12.5 percent) lower than July 2019, J.D. Power reports.
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