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June used truck retail prices follow continuing declines in auction prices

Gap closes between decline in used truck auction values and retail prices

A row of used trucks at a Ritchie Brothers auction in Houston. Prices are falling at auction and retail. (Photo: Jim Allen/FreightWaves)

Used truck auction prices continue to drop from nosebleed heights. Now trucks at retail are selling for less. But both channels remain near historic peaks.

Auction volumes in June reached an 18-month high, according to J.D. Power Valuation Services. Small fleet liquidations, large fleets dumping their oldest units and individuals either getting out of the industry or going to work for a fleet drove the jump.

Auction values stabilized after rising for 18 straight months, according to Ritchie Brothers Asset Solutions, a major auctioneer of used trucks and off-road equipment.

Ritchie Brothers estimates that for the three months ending June 30 that auction prices for used truck tractors increased 39%. That compared to the same time frame in 2021. (Source: Ritchie Brothers)

The highest new truck sales of the year trickled down to the used market. An easing in months of supply chain disruptions allowed manufacturers to deliver more new trucks. U.S. Class 8 retail sales of new trucks were 12.7% higher in June than the same month a year ago, according to Wards Intelligence.

Used trucks retail pricing June swoon

Power predicted it would take two to three months for retail prices to begin falling after auction values began to drop. As if on cue, that is what happened.

“U.S. used truck pricing moved sooner and to a greater degree in the auction and wholesale markets, giving those who live in the retail world a sneak peek as to where their market might be heading,” said Steve Tam, vice president at ACT Research.

Late model year low-mileage trucks still command extremely strong money, said Chris Visser, who writes Power’s monthly Commercial Vehicle Guidelines newsletter. 

Overall, the month-over-month decline in retail prices dropped 2.7% for 2021 models, 2.6% for 2020 models and 17.1% for 2019 models. A glut of identical 2019 models came into retail dealerships, accounting for the steeper decline, Power said. 

Three- to 5-year-old trucks brought an average of 8.2% less money in June than May.

The age group brought 77.9% more money in the first six months of 2022 than the same period of 2021. Overall, retail pricing is still roughly 50% higher than the last pre-pandemic peak in late-2018.

Used truck auction and asking prices gap widens

A market report from Sandhills Global shows a widening gap between asking and auction values, indicating a further drop in sleeper truck auction and asking values.

That projection is consistent with Power’s findings that auction prices for 4- to 6-year-old sleepers have depreciated 6.9% per month on average.

The pullback in used truck prices also reflects a big decline in spot freight rates, which exceeded $4 a mile on some lanes until beginning to soften in February. 

Owner-operators who bought or leased a used truck at a record price almost immediately found that declining rates would not cover the equipment cost. Skyrocketing diesel fuel prices and a big jump in inflation ate further into profitability. Cutting their losses, a substantial number of truckers gave up their operating authorities and signed on to drive with for-hire fleets.

“The sense of urgency is mostly gone, and potential buyers are cautious,” Visser wrote in Guidelines. “However, contract freight activity is still healthy, fleets will probably keep some capacity in reserve due to the unpredictable nature of the ongoing supply chain mess and the new truck backlog is still substantial.”

Contract freight rates are starting to show signs of near-term softening, Tam said, though they remain significantly higher than this time last year.

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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.