Used truck market is strong and steady: J.D. Power

Some highlights from this months’s J.D. Power Valuation Services used truck report for May:

–Trade has been slower than expected. As a result, prices have held up. In the auction market, “the number of trades had not yet ramped up to expected levels,” the report said. At auction, the average price of 2015 model year trucks rose 11.7% from a month earlier to $45,500. The increases were less dramatic for later model used trucks, with 2014 trucks up 3.5%, 2013 vehicles up 5.6% and 2012 trucks down slightly from a month earlier. For the four months of 2018, at auction trucks 4-6 years old brought in an average 20% more dollars than the corresponding period last year. “Demand has clearly picked up, but we still predict an accelerated volumes of trades in the upcoming months,” the report said. As a result, JD Power is sticking to its projected depreciation of 2% per month.

–At retail, where the most recent data looked at by JD Power is for March, the market was described as “flat to mildly upward,” even though some of the reported numbers were decidedly strong. For the most recent used truck model year reported by the research group, 2016 trucks averaged $84,565, which was 11.4% more than in March.  Like with auction figures, the gains as the vehicle age was older were smaller: 3.5% for 2015 and 3% less for 2014. For the entire quarter, the average gain in price for used trucks sold at retail was 4.8%.

–Sales of class 8 trucks per dealership was 5.7 trucks per “rooftop,” or per dealership, which JD Power said is the most in 10 months. “Winter weather is behind us, the freight environment remains red-hot, and buyers are relatively optimistic about the economy, so expect more dealership traffic,” the report said.

–All forecasts for new builds in the class 8 sector are strong, with significant backlogs. That fact “will add supply to a market already expected to increase in 2018.” But the supply would be coming into a strong market: “Demand has improved quite a bit in recent months, which will keep deprecation at around the 2% level–on average–by year’s end,” the report said in its conclusion.