According to the new State of the Industry: U.S. Classes 3-8 Used Trucks report from ACT Research, used Class 8 retail volumes (same dealer sales) rose 12% in May over April.
ACT VP Steve Tam, who in a summary of the report said, “Sales usually slow 4% to 5% in May, so the increase was not only uncharacteristic but also presents a bit of a conundrum in the context of the current economic and freight environments. As owner-operators and smaller fleets in particular exit the industry, inventory continues to increase. This is providing remaining fleets with more options than they have had in a long time.”
“Auction sales increased 32% month-over-month in May,” Tam noted. “Dealers continued their risk-averse track, selling 19% fewer wholesale units compared to April. Combined, the total market swelled 13% in May [compared to April]. Compared to May 2022, the retail market was 17% larger. The auction and wholesale segments also expanded, 43% and 79%, respectively. Their combined performance drove the total market 31% higher year-over-year.”
He concluded, “Despite the current anemic economic and soft freight conditions, the comparison highlights just how tough conditions were in 2022 with respect to scarce inventory. As the year progresses, the year-to-date scenario also continues to diverge from last year.”
J.D. Power Valuation Services found that major class 8 vehicle manufactures, Freightliner, Kenworth and Peterbilt, International, and Volvo and Mack are getting cheaper but with extremely high mileage.
“One side effect of the 2020-2022 new truck shortage is trucks that were obtained accumulated extremely high mileage due to very little downtime,” the new J.D. Power report states. “In addition to the aforementioned average of 170,000 miles per year for 2021s, the 2022s sold in May averaged 180,000 miles per year, and 2020s (technically not part of the shortage, but still affected by it since they were only a year old when it began) averaged a whopping 185,000 miles per year. This dynamic represents a headwind to selling prices going forward.”
In May 2023, the average sleeper tractor was 72 months old, had 471,232 miles and was purchased for $72,064, the report says.
In April, a month prior, the average sleeper was four months older, had 29,828 (6.8%) more miles and brought $2,503 (3.4%) less money. Compared with May 2022, this average sleeper was one month older, had 26,971 (6.1%) more miles and sold for $47,166 (40.0%) less.
According to J.D. Power, average retail for 2- to 6-year-old trucks in May by model year was:
- 2022: $142,621, or $29,900 (26.5%) higher than April
- 2021: $112,304, $1,863 (1.6%) lower than April
- 2020: $83,334, $1,414 (1.7%) lower than April
- 2019: $68,245, $1,091 (1.6%) lower than April
- 2018: $53,890, $1,161 (2.1%) lower than April
“Don’t read too much into the monthly swings in our average for the 2022 model year,” the report cautions. “Low volume of sales combined with a shifting mix of trucks sold means a multi-month trend is a more reliable indicator of market performance for the newest used trucks.”
It continues: “Otherwise, 3- to 5-year-old trucks brought an average of 1.6% less money than April, and 35.1% less than May 2022. The first five months of 2023 averaged 29.4% less money than the same period of 2022. Monthly depreciation in 2023 is currently averaging 3.8%. Late-model sleepers are still bringing about 20% more money than the last strong pre-pandemic period of 2018 in nominal dollars, or roughly the same money when adjusted for inflation.”