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Used-truck prices on the rise


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April activity points to Q2 seeing prices increase on resale and auction markets

Fleet Owner / June 2, 2014

If April is any indication of how the used-truck market will perform in Q2, prices will be rising in both the resale and auction markets, according to the “Commercial Truck Monthly Report” for April on the vehicle-resale market prepared by The Truck Blue Book (TBB).

The report states that April brought on price increases of 14% and 33% in those markets, respectively. What’s more, prices were higher than Q1’s average price by almost 4% and 2% in the resale and auction markets.

“Heavy-duty prices increased 13% compared to Q1 in the asking-price market and medium-duty prices increased 11% compared to Q1 in the auction-price market,” the report’s author Jessica Carr, TBB’s associate analyst-- commercial trucks, told FleetOwner. She also noted that “volume fell in every market except medium-duty asking prices, where it rose 11%.”

Carr also advised that “April showed positive change in asking and auction prices for the start of Q2.” And while asking prices increased across all five regions tracked, she said “volume was down drastically throughout April on the heavy-duty market.”

Per Carr, April saw price increases across the board after the “minimal changes” seen during March.

Key takeaways from the April report include:

- Heavy-duty market recorded increases on both asking and auction prices at 15.7% and 30.8%, respectively

- Medium duty saw a smaller change, however, it was also in a positive direction-- with 3.5% in asking price and 6.3% in auction prices

- Volume on the auction market fell for both heavy and medium duty, at 42% for heavy and 66% for medium while the asking volume dropped for heavy at 22.6% and increased 12.3% on medium duty

“As the market prepares for the usual sluggish spring and summer sales,” Carr observed, “prices are beginning to rise to compensate for the lesser number of sales at this time.

“When focusing on commercial trucks between model years 2004 to 2014 in the U.S. with less than one-million miles, the average asking prices increased to the highest averages in 2014 so far for both medium- and heavy-duty trucks,” she continued.

TBB found that overall Q1 asking prices were higher due to a significant increase in newer model-year (MY) volume, but the number of trucks on the market fell during April.

Carr said the “significant drop” in trucks being sold was primarily driven by trucks falling within MYs 2008 to 2004

As for, medium- and heavy-duty trucks of MY 2010 and newer, all saw volume increases that drove the average asking prices on both markets upward.

“We expect this trend to continue into the next few months as more of the new models enter the used market,” Carr remarked.

“The largest volume increase from March to April was on the 2013 MYs, which is to be expected as they are more reasonably priced than a 2014 or a new 2013 while still having lower mileage than the 2011 or 2012s,” she continued.

On the other hand, TBB discerned the largest decrease was for 2005 models, which dropped more than 50%.

Heavy-duty trends spotted by TBB include:

- Q1’s positive momentum for asking-price increases continued into April as asking

- Prices increased 16% and auction prices rose 31%-- marking a much larger increase than the previous months

- Q1 asking prices averaged higher than any quarter of 2013 and April started off Q2 even higher

- Q2 auction prices increased as well, following the Q1 increase pricing higher than 2013 auction prices

- As expected, prices on newer models have decreased since April of 2013 over 10% on MYs 2011 to 2014. However, those of MYs 2004 to 2006 saw increases year over year

“The profound drop in truck supply on the used market has evidently caused prices to skyrocket in terms of the older models,” Carr pointed out.

“The newer models are becoming more abundant in the more recent months as a larger number of 2013 and 2014 used trucks enter the market with competitive pricing,” she continued.

Carr also observed that Q1 2014 started off the year with higher prices than Q1 of 2013. She said that “fed into the beginning of Q2 as April of 2014 saw a higher average asking price than 2013. This trend was caused by more volume on the newer model end.”

Medium-duty trends spotted by TBB include:

- Medium-duty market saw almost a 4% increase in asking prices and a 6% increase at auction during April

- Large volume increases in newer trucks raised the overall average higher than

- March. Even though the 2014s were stagnant, 2013s saw a 2% increase and 2012s decreased 6% during April

- Medium-duty prices steadily inclined through Q1, showing higher average asking prices in March than January, while the increase in April brought prices 6% higher than January

- Most model years saw minimum to no change in price during April

- A number of MYs saw no change at all, including years 2014, 2009 and 2004

- Medium-duty asking prices were up 23% from April last year

- Medium-duty volume is down immensely—year over year it was across the board with the exception of 2014 trucks; however, years 2008 to 2004 were impacted the most

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It's not just the truck market on the rise. The general used car market is also on fire. The last two months I've been at the dealer auctions and cars are doing $1500-2000 over Galves. I've seen Corvettes and Mercedes SL's doing near retail prices and diesel pick ups pulling well over average wholesale. Jeep Wranglers are in the same insane pricing war as well. I have no idea what's going on but it's getting harder to buy good units.

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