It’s no secret that the value of used trucks has reached astronomical highs.
My team has seen sleepers with up to 600,000 miles sell for $80,000 and $90,000. In a normal market, those same trucks would have sold for closer to $40,000.
A host of reasons are to blame, including a shortage of new vehicles and the large amount of freight that needed to be moved immediately following the lockdown phase of the pandemic.
In recent months, we’ve been transitioning into a different market where equipment values are falling very quickly. Tonnage has been down overall, and due to that, spot freight rates have dropped significantly. This, along with skyrocketing fuel prices, has put huge pricing pressure on truckers and squeezed profits. Some are being forced to sell some of their idle or unprofitable trucks. This means more trucks entering the used market.
Used trucks are a commodity, so when supply increases and demand falls, prices decrease. In this instance, the drop has been dramatic. And it’s not just the price of Class 8 tractors that are falling. Medium- and light-duty trucks and trailer prices are falling too. They are just not going down as fast as the prices of Class 8 units.
Market demand for freight movement, the subsequent change in freight rates and high fuel prices will dictate the market. One factor that will help balance the equation is the continued shortage of new trucks, and that may continue for years to come.
In a falling market, you want to price your equipment properly to sell immediately without leaving money on the table. A remarketing organization can help you price and sell your used assets, allowing you to achieve the optimum return on your equipment.
If you purchased new trucks three to five years ago and used normal depreciation, then the potential gains on your equipment will likely still be substantial.
While it may be unsettling not knowing what the future holds, it’s par for the course these days – especially in the trucking industry. One thing I know for sure: now would be a good time to take any idle equipment to the market as soon as possible.
Dale Tower is vice president of remarketing at Corcentric, a position he has held since 2004. Tower comes from a long transportation background formerly serving in executive roles at Ryder and Budget Rent a Car as well as serving in general manager roles at OEM Dealerships. His primary focus is on the development and growth of remarketing services that assist Corcentric fleets in selling their used equipment.