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The slowdown in new truck production during the pandemic led to a notable shortage in the market. As a result, fleets and owner-operators who typically cycle out their trucks every few years were compelled to retain their older trucks longer. This shortage in new trucks catalyzed a significant increase in used truck prices.
Steve Tam from ACT Research pointed out that used truck prices soared, with averages around $90,000 across sales channels at their peak. The retail market saw even higher averages, with newer used trucks fetching prices higher than their brand-new counterparts.
About 18 months after reaching its peak, the used truck market saw a significant shift. New truck production gradually returned to pre-pandemic levels, leading to a decrease in used truck prices. This shift transformed the market dynamics from a sellers‘ to a buyers‘ market, albeit with certain caveats.
As freight rates rose, new drivers and companies entered the market, initially depleting used truck inventories. However, as supply chain constraints eased and the flow of new trucks resumed, the secondary market began to see an influx of inventory.
According to ACT’s “State of the Industry: U.S. Classes 3-8 Used Trucks” report, the average price of used trucks across all sales channels was about $39,200 in September. This figure contrasts sharply with the pre-pandemic average of around $30,000, which, adjusted for inflation, would be about $36,000 today.
Experts like Tam believe that used truck pricing may dip slightly more before reaching a stable point, closely mirroring the previous cycle’s low when adjusted for inflation.
Daniel Hughes from Arrow Truck Sales observes that used inventories are robust, and prices have considerably decreased in the last two years. He suggests that the current market presents an ideal opportunity for buyers in favorable financial positions. J.D. Power’s “Commercial Vehicle Guidelines” report supports this view, indicating that used prices at auction are now aligning with the strong pre-pandemic period of 2018, considering nominal figures and inflation adjustments.
The experience of John Henderson, a small fleet owner, highlights the critical importance of due diligence in the used truck market. Henderson’s encounter with engine failure due to a known camshaft issue in one of his newly purchased trucks underscores the need for buyers to conduct thorough research and not rely solely on dealer assurances.
The used truck market’s journey through the pandemic era underscores the industry’s resilience and adaptability. While the market appears to be stabilizing, it remains crucial for buyers to navigate these waters with caution and informed decision-making.
For those keen on staying abreast of the latest developments in the trucking industry or considering venturing into the used truck market, sharing this analysis could be immensely beneficial. Stay connected with us for more insights.
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