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Doubling down: Auction prices for used tractors up 96.3% in 2021

Choked-off new truck supply reduces good used trucks availability to a trickle

Used truck auction prices nearly doubled in 2021 compared to the year earlier. (Photo: Jim Allen/FreightWaves)

Used truck prices, especially for newer models, continued their explosive growth in December, with auction prices finishing the year nearly double 2020.

Supply chain issues — led by a shortage of semiconductors — tight supply and unprecedented demand all contributed to the unrelenting inflation. 

“Pricing in calendar year 2021 was 96.3% higher than in 2020 and 89.2% higher than in 2019. Late-model trucks increased in value an average of 7.3% per month in 2021,” according to J.D. Power Valuation Services.

The average sleeper tractor sold for $90,938 at retail in December. It was 73 months old and had 468,285 miles. The truck was six months older, had 12,865, or 2.8% more miles, and brought $41,748, or 85.8% more money.

Watch now: Used truck prices continue on a higher march

“History will show 2021 as the year with the highest used truck retail pricing in the modern era, so far,” Power wrote in its monthly Guidelines newsletter.

After months of choked-off supply of new trucks preventing fleets from disposing of older equipment, December new truck sales ticked upward to the highest deliveries since September 2019, according to WardsAuto. That freed up some used truck supply.

Nothing more than an anomaly

“OEMs typically look to make inventory adjustments at the end of the year. Still, the figure does suggest there were enough parts available to finish a very healthy number of trucks for at least one month,” said Steve Tam, an ACT Research vice president who follows the used equipment market.

But nothing suggests December was more than an anomaly. Power said with the small number of auctions scheduled in January, a solid read of market conditions will have to wait until later in the quarter.

“While the short-term outlook for pricing calls for sustained strength, albeit at a declining rate, we remain convinced that all of the dynamics currently in play suggest an orderly reversion to a more normal — whatever that is — market, as opposed to a free-fall or crash scenario,” Tam said.

Power agreed. “We don’t consider December’s results evidence of a market shift, but we do consider the new truck delivery figure a surprise.”

Ritchie Bros., the Canada-based auctioneers of used trucks and equipment, estimated that Q4 prices for used tractors in the U.S. rose 65% compared to the October-December period a year earlier.

“We attracted a record number of bidders in 2021, resulting in the strongest equipment pricing we have ever seen,” said Doug Olive, Ritchie Bros. senior vice president of pricing. “It’s a seller’s market and consignors around the world are taking advantage by turning their surplus assets into cash.”  

That includes trucks that fleets lack drivers to operate. A shortage of long-haul drivers at for-hire carriers led to per-mile pay increases, sign-on bonuses and other inducements to get drivers to switch companies or return to the profession after exiting during the COVID pandemic.

Power said its subscription-based values and residual forecasts in January contained the largest month-over-month boosts in its 29-year history. 

“Overall, the market will continue to quickly absorb any increased inventory as long as buyers remain confident of strong freight rates,” Power wrote.

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Alan Adler

Alan Adler is an award-winning journalist who worked for The Associated Press and the Detroit Free Press. He also spent two decades in domestic and international media relations and executive communications with General Motors.