TYSONS, Va. — May’s Class 8 market was basically the opposite of April, with pricing down and volume up in both the auction and retail channels.
So says the J.D. Power Valuation Services Commercial Truck Guidelines published by the National Automobile Dealers Association.
“What April bringeth, May taketh away,” the report begins. “Pricing of our benchmark model was back down after an unusual April with volume way up compared to recent months. May’s activity looked more logical than April’s given the market dynamics currently in effect.
The report detailed Class 8 used truck sales for model years 2011-2016:
- Model year 2016: $36,500 average; $7,420 (17.0%) lower than April
- Model year 2015: $36,000 average; $8,380 (18.9%) lower than April
- Model year 2014: $28,750 average; $3,428 (10.7%) lower than April
- Model year 2013: $23,500 average; $1,300 (5.2%) lower than April
- Model year 2012: $18,750 average; $2,964 (13.7 %) lower than April
- Model year 2011: $17,765 average; $1,730 (10.8%) higher than April
In the first 5 months of 2019, 4-6 year-old examples of the benchmark model brought 2.5% more money than in the same period of 2018, the review said, noting that the number of 4-6 year-old trucks sold was notably higher than any month since June 2018.
Monthly depreciation for this cohort is now averaging 2.5%, in line with what experts were predicting.
Low-mileage trucks are still bringing strong money, but the market is redefining “low mileage” downward.
The review said May’s retail pricing was similar to April’s, with spec and model mix accounting for month-over-month variation. Market weakness in the auction channel did not carry over to the retail channel.
The average sleeper tractor retailed in May was 69 months old, had 456,127 miles, and brought $57,613.
Compared to April, the average sleeper was two months younger, had 12,103 (2.6%) fewer miles, and brought $815 (1.4%) more money. Compared to May 2018, this average sleeper was one month older, had 7,950 (1.8%) more miles, and brought $4,551 (8.6%) more money.
Looking at trucks three to five years of age, May’s average pricing was as follows:
- Model year 2017: $93,430; $4,604 (5.2%) higher than April
- Model year 2016: $68,297; $1,939 (2.8%) lower than April
- Model year 2015: $57,137; $532 (1.5%) lower than April
The high average for model year 2017 is due to a group of owner-operator spec trucks in the data. On an apples-to-apples basis, there was little change in value month-over-month. Year-over-year, late-model trucks sold in the first five months of 2019 brought 12.3% more money than in the same period of 2018.
Depreciation in the first five months of 2019 averaged 1.3% per month, compared to 1.6% in the same period of 2018.
Class 8 sales per dealership dropped to 3.9 in May, a 0.4 truck decrease compared to April, and the first time the average has dropped below 4.0 since January. Dealers are selling an average of 10.6% fewer trucks in 2019 compared to the same period of 2018.
As for a forecast, the review said the second quarter is drawing to a close, and, as predicted, used truck pricing remained strong in the first half of the year. This month’s lower pricing should be indicative of what to expect in upcoming months, but in an economy heavily impacted by policy uncertainty, forecasting is more difficult than in more stable times.
According to the review, the freight, financial, and manufacturing sectors are pointing to slowing growth, while the consumer sector remains strong.
Unfortunately, the review said, the consumer sector is a trailing indicator while the others are leading. The bottom line is any notable decline in economic conditions will cause an equally notable influx of used trucks to enter the market.
The Trucker News Staff produces engaging content for not only TheTrucker.com, but also The Trucker Newspaper, which has been serving the trucking industry for more than 30 years. With a focus on drivers, the Trucker News Staff aims to provide relevant, objective content pertaining to the trucking segment of the transportation industry. The Trucker News Staff is based in Little Rock, Arkansas.