COLUMBUS, Ind. — Preliminary used Class 8 volumes (same-dealer sales) dropped 5% month over month and 24% year over year in August. Through the first eight months of the year, activity is 8% higher compared to the same period a year ago, according to the latest preliminary release of the State of the Industry: U.S. Classes 3-8 Used Trucks published by ACT Research.
Other data released in ACT’s preliminary report includes month-over-month comparisons for August 2021, which showed that average prices of used trucks rose 7%, as average miles were flat and age rose 5%, compared to July. Compared to August 2020, average price was 47% higher, with average miles and age each up 3% and 11%, respectively. On a year-to-date basis, average price is 33% above its year-ago level for the first eight months of 2020, with average miles down 1% and age flat on a year-to-date basis.
“Preliminary same-dealer sales descended further in August. In a normal market, sales would typically have increased in August, but this market is anything but typical,” said Steve Tam, vice president at ACT Research.
“In the context of what can only be described as a stellar economic recovery, demand for seemingly everything, including commercial vehicles, is off the charts. However, sating that demand is proving to be an insurmountable challenge.”
Regarding used truck prices, Tam added, “As is usually the case when demand is strong and supply is weak, competition heats up and prices become the battleground. Following a brief respite in July, used truck price appreciation returned with a vengeance in August. Many, especially those who feared the market may have peaked in July, are relieved that price growth resumed in August. We hold fast to our outlook that pricing will most likely peak around mid-year 2022, based on current supply and demand dynamics.”
Asked whether there will be an end to the upward trend of used truck prices, Tam commented, “With considerably fewer options for both new and used equipment, the behavior drives up truck prices. This has the unintended consequence of attracting new operators/trucking companies, sending demand for units even higher, which ultimately means truck prices are likely headed even higher. Eventually, the cycle will balance itself; the key question is when.”