Pricing continued falling in the auction and retail used truck prices in August but at a slower pace than July, J.D. Power reported this week in its September 2022 Commercial Truck Guidelines industry report.
With auction volumes on the rise and retail pricing leveling out, J.D. Power says the used truck sector may be nearing a soft floor and could stabilize over the final quarter of the 2022.
In the auction market, J.D. Power reports channels sold a moderately higher volume of trucks in August 2022 as fleets continued to offload their highest-mileage units and owner-operators continued to shift back to fleets or out of the industry. Depreciation for trucks with mileage typical for their model year appears to have relaxed in the month, the company says.
In its benchmark model, 2- to 6-year-old trucks average pricing was as follows:
- Model year (MY) 2021: No trucks sold
- MY 2020: $93,426; $23,414 (20.0 percent) lower than July
- MY 2019: $75,325; $5,112 (6.4 percent) lower than July
- MY 2018: $64,406; $3,083 (5.0 percent) higher than July
- MY 2017: $44,007; $1,229 (2.9 percent) higher than July
In August, J.D. Power reports 3 - to 6-year-old trucks averaged 8.0 percent less money than July, but 3.2 percent more money than August 2021. Year over year, late-model trucks sold in the first eight months of 2022 averaged 61 percent more money than the same period of 2021. Year to date, 3- to 6-year-old sleepers are depreciating 6.1 percent per month on average.
J.D. Power also notes that despite the ongoing market correction, selling prices are still over 45 percent higher than the last pre-pandemic peak. Demand also continues to fall back towards a more rational level, and the company states various tailwinds will support pricing to an extent.
The statistics were better in the retail space, though J.D. Power notes incomplete market data could require the company to amend its August analysis next month. "With that in mind, August’s retail environment appears similar to July 2022, with few check-writers buying trucks and selling prices more stable than expected," the company says.
J.D. Power says the average sleeper tractor retailed in August was 68 months old, had 439,965 miles and brought $107,977. Compared with July, this average sleeper was two months older, had essentially identical miles, and brought $64 (0.1 percent) less money. Compared with August 2021, the company says this average sleeper was five months newer, had 14,142 (3.1 percent) fewer miles, and brought $33,484 (44.9 percent) more money.
In its 2- to 6-year-old benchmark model, pricing was as follows:
- MY2021: $153,572; $843 (0.5 percent) lower than July
- MY 2020: $140,214; $3,585 (2.5 percent) lower than July
- MY 2019: $113,248; $272 (0.2 percent) lower than July
- MY 2018: $93,121; $4,123 (4.2 percent) lower than July
- MY 2017: $75,968; $3,153 (4.3 percent) higher than July
The company states the sample size of model-year 2021 trucks continues to increase, including a wider range of mileage. This means that going forward, "the average price figure for that model year should look more like August and July than earlier months," J.D. Power states.
Beyond that model year, 3- to 5-year-old trucks brought an average of 2.1 percent less money in August than July. Trucks in this age group brought 68.6 percent more money in the first eight months of 2022 than the same period of 2021. Depreciation is averaging 1.5 percent per month in 2022, less than J.D. Power had expected by this point in the year, and substantially better than the auction channel.
"Retail pricing for late-model trucks is still more than 50 percent higher than the last pre-pandemic peak," the company states.
Medium-duty pricing was mixed based on segment. J.D. Power estimates "some degree of correction is underway."
Class 3-4 cabovers benchmark group averaged $26,886 in August. This figure is $1,500 (5.9 percent) higher than July, and $6,537 (32.1 percent) higher than August 2021. For Class 4 conventionals, average pricing was $31,084 in August, $5,273 (14.5 percent) lower than July but $743 (2.4 percent) higher than August 2021. Class 6 conventionals averaged $41,404 in August, $41 (0.1 percent) lower than July but $8,218 (24.5 percent) higher than August 2021.
In its forecast for the months ahead, J.D. Power reports August’s relaxed auction depreciation for trucks with 400,000 to 550,000 miles was "somewhat encouraging." The company also states "we expect auction pricing to hit a 'soft floor' before the end of the year, landing about 20 percent above the most recent pre-pandemic peak of early 2019."
J.D. Power also believes there are two tailwinds that will support used pricing through the end of the year—new truck production and freight levels. The company says production rates are rising but slowly and freight levels while falling remain well ahead of pre-pandemic levels.
"Keep in mind the macroeconomy is correcting from the most major black swan event in multiple generations, so negative results as we come down the other side of the peak were expected. For the best perspective, compare figures not just month over month and year over year, but also to the pre-pandemic trend," the company says.
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