Used truck prices tumbled throughout 2016. The average retail price of three- to five-year-old tractors plunged from $73,300 in January 2016 to $53,900 in December, according to J.D. Power Valuation Services.
Though prices stabilized in the first half of 2017 – holding near $60,000 through June – that modest rebound might be only a calm before the storm. Tractors sold in 2014 and 2015 are expected to flood the market in numbers that should restrain pricing through about 2020, forecasts Steve Clough, president of Arrow Truck Sales.
It’s possible a spike in demand for more truck capacity could occur, boosting demand for used trucks and countering the low prices resulting from the glut. However, projections for growth in freight movement and GDP are modest. If that holds, used truck demand won’t help absorb the excess supply, Clough says.
Demand for used equipment could be depressed later this year and into next, at least for some segments of the used market, says Don Ake, FTR analyst. Owner-operators and small fleets may be reluctant to buy as they comply with the electronic logging device mandate taking effect Dec. 18, he says.
“If they’re uncertain about how this is going to impact them, they may run their truck a year longer than normal,” Ake says.
On the flipside, should the ELD mandate restrict the industry’s capacity, as many predict, and the freight market quickly accelerates, fleets could turn to the used market for cheap capacity, he says.
