Driven by freight demand and truck utilization, the used truck market is one to watch.
Class 8 same dealer used truck retail sales received a boost in January, notably at 17% month-over-month, according to preliminary numbers from ACT Research’s State of the Industry: U.S. Classes 3-8 Used Trucks. With sales usually slow in the beginning of the year, the retail sales gain is uncharacteristic, said Steve Tam, vice president at ACT Research. January retail sales historically lag the average month by about 9% and see an eight-percentage point decline from December, he explained.
“Auctions were 59% lower month-over-month, while wholesale activity slumped 20% month-over-month,” he said. “In total, the used truck industry declined, with preliminary same dealer sales slowed 31% month-over-month.”
Tam believes there’s a combination of factors leading to better-than-expected sales: the availability and the price of equipment. With a variety of choices available, buyers can acquire new trucks at every price point. “Make no mistake about it," Tam added, "lots of new trucking companies are getting operating authority every day.”
Likewise, Tam said inventory levels are elevated and likely to head higher, while the pace of new entrants is likely to show. Combined, those considerations will keep downward pressure on pricing in the first quarter of the year, keeping the pricing pendulum in the buyers’ court.
J.D. Power’s Commercial Vehicle Guidelines released in January indicated that auction volume was up substantially in December 2023, but pricing was surprisingly stable. Retail sales volume remains depressed, and pricing is now comparable with the weak period of 2019. Conditions should remain similar in the first two quarters of 2024, it said.
