While the Class 8 heavy duty truck industry has been mired in recession and dragged down by a bloated backlog since 2018, the used truck market hasn’t seen the same collapse yet.
But the key word there, according to several experts, is yet. Brian Cota, vice president of national accounts at Daimler and Steve Tam, a vice president at ACT Research gave presentations that showed the used truck market under pressure and predicted that things could get worse.
Tam "presented a slide showing ACT Research’s most recent data on used Class 8 sales in June, showing an average price that month 2 percent higher than in May and 6 percent more than June 2018," according to FreightWaves.
He also noted that "year-to-date, prices are up 10 percent. That is occurring against a backdrop of average miles on a used Class 8 truck flat to down 2 percent from used truck sales in earlier periods."
Tam also shared a chart of the average sale price of a Class 8 used truck. Last year, these prices year-over-year were rising more than 15%. And although there was a solid increase in 2018 used truck demand he said that price increases would be flat to down 5% in 2020.
One silver lining has been the quality of the used vehicles coming to market. Cota said: “The vehicles being traded out today are all good trucks. They are very reliable and fuel-efficient. They are highly desirable trucks.”
But over the last few months, the used truck market has slowed down. “The pre-owned vehicle market has a different feel than three months ago,” he said. While Cota argued that the quality of used trucks could still act as a catalyst for sales, the last line in Tam's presentation was simply:
“It’s going to get worse before it gets better.”
Earlier this month we noted that Class 8 orders for July had crashed 81% to their lowest monthly total since 2010. The industry booked 10,200 units in July, an astonishing 81% year over year fall, according to ACT Research.
This is also down 21% from June and marks the lowest monthly order tally since February 2010. Net trailer orders also continued to plunge, according to data released several weeks ago.