Posted on 03/18/2022 2:21:21 PM PDT by blam
Extra safety features not really a factor as freight demand meets inadequate supply
Trucks await near-record prices at a Ritchie Bros. auction in Houston,. (Photo: Jim Allen/FreightWaves)
Rising interest rates and the potential for a slowing economy so far are having no effect on runaway prices for used trucks.
“February data is the last we’ll have that does not reflect any effect of the Russia-Ukraine war,” Chris Visser, J.D. Power Valuation Services senior analyst, wrote in the company’s March Guidelines report. “Pricing in February continued to break records and, as of this writing in mid-March, there does not appear to be any war-effect yet.”
Nor would the first of an expected seven quarter-point interest rate hikes approved Wednesday by the Federal Reserve have impacted February auction and retail sales of used trucks.
What did make a difference was a solid month of new truck sales in December. That led fleets that had been holding on to older trucks to release them to auctions, albeit later in life than usual.
Canadian auction house Ritchie Brothers estimated that for the three months ending in February, prices for used truck tractors increased 63% compared to the same period a year ago.
“A large number of model-year 2020 trucks sold this month, which could be a one-month anomaly resulting from the unexpectedly high new truck deliveries in December 2021,” Visser wrote. Auction prices dipped a bit from history-making highs as 2019 models showed up with higher-than-usual miles, the effect of staying in service longer.
New-used relationship out of balance
“In the current environment, used truck pricing is determined mainly by the relationship between the super-hot freight market and the severely inadequate supply of seated trucks,” he told FreightWaves. “Demand for new trucks is through the roof even though they’re the most expensive they’ve ever been, so MSRP is not a primary factor driving buyers to used trucks.”
But if the market were to reverse — which is unlikely in the near term — “used truck pricing would drop, regardless of what new trucks are priced at. So I’d say the relationship between new and used truck pricing is weak at present.”
When new technology or regulations like the tougher 2024 greenhouse gas emissions standards in California, are coming, the market often switches to a “pre-buy” mode, snapping up current products to avoid higher prices in the next model year. With current backlogs and pent-up demand for new trucks estimated at 100,000 units, even that scenario is in question.
“In more typical times, if an upcoming price hike and/or technological change is substantial enough, buyers will increasingly look for low-mileage used equipment in place of new to avoid the increase or technology,” Visser said.
Roaring retail prices
At retail, the average sleeper tractor sold for $110,686 in February, was 69 months old and had 452,369 miles on the odometer. Retail prices for every model year from 2017 to 2021 rose in February.
Three-to-5-year-old trucks sold for an average of 6% more in February than in January. Trucks in this age group brought 77.6% more money in the first two months of 2022 than the same period of 2021.
Preliminary used Class 8 retail volumes — same-dealer sales — grew 20% month over month but were 14% lower compared to February 2021, according to ACT Research.
“It is obvious that demand for used equipment remains robust,” said Steve Tam, ACT Research vice president. “Regardless, inventory is still in short supply, so longer-term comparisons continue to be unfavorable.”
Expect more theft everywhere.
An Unprecedented Wave Of Brazen Gasoline Thefts Is Rippling Across The US
Be smart...your life is not worth a catalytic converter or a few gallons of gasoline.
A startled thief may act crazy.
(Don't be an easy target)
If I catch someone messing with our car they will be dead, unless they shoot me first.
What a great country we’ve turned out to be!
In my part of the world thieves are the ones concerned if their lives are worth a few dollars.
I’m thinking high fuel prices and new emission standards might kill the used truck market. Especially places like California.
Seems manufactures of aluminum van trailers should just take them to the auction. Tunica , MS Taylor and Martin auction, a 2021 53’ dry van brought $72,000 plus 5% buyers fee.
“A startled thief may act crazy.”
Then take advantage of that crazy. Sorry you’re such a coward.
No one’s life is worth a few gallons of gas, but to let such brazen theft and violence continue is inviting more of the same.
Is their life worth dying over a few gallons of gas? I’m willing to answer that question for them.
Hmmm.
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