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Used truck market normalizing

Jason Cannon April 17, 2014

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After an explosive January, retail and wholesale volume of used trucks returned to trend in February, according to data released by NADA this week.

While retail sleeper tractor pricing remained at record highs, wholesale pricing returned to average levels, along with age and mileage figures returning to typical positions.

A crippling winter across the U.S. impacted volume of trucks sold, but retail pricing remained unaffected, according to the report. Demand remained strong enough through the roughest months to keep pricing at or near record levels.

February’s slid from January’s record by just $262. Mileage was up 8024 (1.5 percent), and age was 1 month older. Year-over-year, February’s pricing was $6720 (12.0 percent) higher, mileage was 11,251 (or 2.1 percent) lower, and age was identical.

“(Model year 2011) trucks continue to push our average to record levels as they enter the market in greater numbers,” says NADA senior analyst Chris Visser, who authored the report. “In December of 2013, this vintage overtook 2010 as the most-common model year sold in the retail market, although this month was an exception, with 2009’s edging out 2011’s. Despite their continued increase in volume, 2011’s have actually gained value during this period.”

Visser says this reflects “inadequate supply of late-model, low- mileage trucks,” adding, “2009s outsold all other model years for the first time in 4 months. 2009’s averaged 554,063 miles this month, putting them at a relatively attractive point in their price/useful life cycle.”

The wholesale market rebounded in February. According to the report, the average sleeper tractor sold at auction or dealer-to-dealer this month brought $31,691, had 723,465 miles, and was 89 months old.

“Month-over-month, February’s pricing was $6858 (17.8 percent) lower than January’s,” Visser says. “Mileage was 99,621 (13.8 percent) higher, and age was 17 months older. Again, January was an outlier.”

“Interest in high-mileage trucks was considerably higher this month. The percentage of sleepers sold with over 600,000 miles returned to a more typical 69 percent, which happens to match the CY2013 average exactly. Compare this result to January’s 47 percent. Not only that, but trucks in our highest mileage band (900 -999K) were the top sellers (in February).”

The wholesale market is somewhat split, Visser notes, with interest concentrated in the under-500K and over-700K segments.

“We expect this trend to smooth out a bit in upcoming months, but it is logical that demand will remain strong for low-mileage trucks. By the same token, there will always be some degree of a market for low-priced, high-mileage trucks.”

Model-year 2007 trucks were again the top seller, regaining this position after giving it up for one month to 2011s.

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