Preliminary used Class 8 truck sales fell 25% in August compared with the same month in a booming 2018 and are running 18% lower year to date, according to ACT Research.
August was the 10th consecutive month of lower used truck sales on month-over-month and year-to-date comparisons. Average prices fell 1% while average miles climbed 2%. The average age of the used truck was unchanged from July.
ACT tracks top-selling Class 8 models at each of the major truck OEMs – Freightliner (Daimler Trucks North America); Kenworth and Peterbilt (Paccar); International (Navistar); and Volvo and Mack (Volvo Trucks North America).
The industry is handling the softening of the used truck market well since it has been expected for two years, said Steve Tam, ACT vice president. Capacity rebalancing should happen quickly, he said.
“Cool heads are prevailing as volumes fall and prices continue to sink, with dealers keeping calm and selling on,” Tam said.
Prices fall in August
According to J.D. Power Valuation Services, formerly the NADA Used Car Guide, a substantial increase in model-year 2013 and 2014 used truck sales increased the supply of lower-priced trucks available.
The rising number of fleet bankruptcies and liquidations since June may partially explain the increased supply, said Chris Visser, J.D. Power senior analyst and product manager.
Except for 2013 models, prices for every year of used truck fell in August.
Model-year 2016: $32,225 average; $14,275 (31.4%) lower than July
Model-year 2015: $26,500 average; $300 (1.1%) lower than July
Model-year 2014: $21,275 average; $2,975 (12.2%) lower than July
Model-year 2013: $18,500 average; $600 (3.4%) higher than July
Model-year 2012: $14,825 average; $675 (4.4%) lower than July
Model-year 2011: $12,075 average; $2,925 (19.5%) lower than July
In the first eight months of 2019, 4-to-6-year old trucks commanded 6.8% less money than in the same period of 2018, Visser said.
The average 5-year-old truck sold for $43,520 at the end of July, according to data from FreightWaves SONAR (UT5.USA).
Truck maker perspective
Navistar International Corp. (NYSE: NAV) CEO Troy Clarke assessed used trucks during a call with industry analysts on Sept. 4.
“Inventories are going up, because (of) the new volume truck sales that we’ve seen this year,” he said. “Our used truck inventories are up as well in the third quarter and we expect to work those lower in Q4.”
Clarke said the backlog of new truck orders from a record 2018 prompted many fleets to hold onto the trucks they would have traded. Now that deliveries of new units are flowing, used trucks are hitting the market in bigger numbers.
“When the market starts to recover, used trucks is the quickest way to add capacity to your fleet and take advantage of rising freight rates,” Clarke said. “Especially on Class 8 sleepers, we as an industry are a little over supplied, so there will be pressure on those prices.”
It could take “a couple of quarters” for the industry to complete its rebalancing, Clarke said.