Used Class 8 Average Price Soars Past $60,000
[Stay on top of transportation news: Get TTNews in your inbox.] The average price for a used Class 8 soared to a new high for the third consecutive month as June sales climbed year-over-year amid the lowest inventory levels yet in this cycle, ACT Research reported. The price hit £61,219, or 51% higher compared with £40,449 a year earlier.
“That was the first time above the £60,000 mark in the 20-year history we’ve got,” ACT Vice President Steve Tam told Transport Topics. May came in at £58,487. Each month, ACT provides an industry estimate based on its survey of a sample of dealers, wholesalers and auctioneers as well as a few large fleets to determine average price, age and mileage, and estimated used Class 8 sales volumes.
Tam “The fact is, there is no let-up in the amount of stuff people want, and are willing to pay for and are trying to get,” Tam said. “The ports are all jammed up.
The railroads are having a horrible time with intermodal. The containers are all in the wrong place, and they can’t get them to where they need them to be in order to use them. “The natural substitute is truck, but yet we are beset by a lack of trucks, lack of drivers.
It’s just keeping things really, really tight, which is boding well for the used truck market.” ACT pegged June used Class 8 sales at 22,800 compared with 18,000 a year earlier and 20,700 in May. Year-to-date sales were up 25% to 130,400 compared with 104,200 in the 2020 period, according to ACT’s industry estimate.
Meanwhile, Paccar Financial Services, a unit of Paccar Inc., earned record pretax income of £107 million in the second quarter, reflecting strong portfolio performance and robust used truck demand, the company noted during its Q2 earnings call. Paccar’s brands include Kenworth Truck Co. and Peterbilt Motors Co.
Feight Paccar CEO Preston Feight said used truck pricing has been very good, from the seller’s perspective. “Obviously, in the year-over-year period in North America, it’s grown in the 40-something percent; in Europe, it’s grown double digits also, [DAF is the company’s European brand].
And so we’ve had great growth in our used truck pricing. “There’s a limited supply of used trucks. I mean, obviously, the Paccar products command a premium in that space and it’s an even more precious premium right now.”
Tam said the industry’s exact inventory level — marked by used trucks always entering and leaving — is not known, but his “inventory barometer” points to it being at the lowest reading in this cycle. “Inventory is constantly churning, but there are fewer and fewer trucks out there to be resold,” he said. “Basically, if buyers want a truck they don’t have as many options as they used to.” In June, average mileage dropped to 423,000 compared with 445,000 in the 2020 period.
The average age improved slightly to 6 years, 5 months compared with 6 years, 7 months a year earlier, according to ACT. Rush
Rush Enterprises, the San Antonio-based truck dealership with 100 locations in 22 states, reported it sold 2,094 used commercial trucks in the second quarter, an increase of 18.4% compared with the second quarter a year ago. Rush represents truck manufacturers Peterbilt, International, Hino, Isuzu, Ford and Mitsubishi. “Used truck demand and values remain high, primarily due to production constraints of Class 8 new trucks,” Chairman and CEO William “Rusty” Rush said during a Q2 earnings call. “Though it is becoming more challenging to maintain a healthy used truck inventory, we believe our third-quarter used truck sales will be consistent with our second-quarter results.”
In the meantime, Tam reported the average price for a 3-year-old sleeper climbed to £98,000. For an 8-year-old heavy-duty truck, it was £23,800, a high for this cycle. “Pretty much across the board we saw prices increase for the age cohorts,” he said, “except in the 7-year-old cohort, which dropped back down in June after they had quite a surge last month.”
Could this be the trucking industry’s roaring ’20s? Business is booming, thanks, in part, to a slew of innovative technologies.
With host Mike Freeze, we begin to wonder what’s next? Hear a snippet above, and get the full program by going to RoadSigns.TTNews.com. Rob Slavin, senior valuation analyst at auction firm Ritchie Bros., said there is a strong return on investment in vehicle maintenance now amid the high prices for used trucks. “There is certainly more of an opportunity to collect that money spent on reconditioning than there has been at any point in the past five years,” he said during an online webinar.
Retail truck buyers don’t want to spend for projects, Slavin said. “They want a truck they can put to work in days not weeks,” he added. “More often than not, if you are going to spend up to £3,000 [on maintenance], you are going to get that back. I could easily say you are going to also get another five bids on that [truck].”
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