Low auction volumes, depreciation totals for used market last month, J.D. Power reports

J.D. Power reports extremely low used auction volumes and depreciation rates below 1 percent in the retail market as key takeaways in this month’s Commercial Truck Guidelines used truck market report.

In the auction market, J.D. Power says August’s low volume totals continued to defy its industry predictions. This indicates supply is very tight. Month-over-month, the volume of the three most-popular sleeper tractors sold though the two largest nationwide auction companies dropped by one unit.

J.D. Power reports its benchmark model showed the following prices in August: Model year (MY) 2014 trucks averaged $39,000, $4,750 (13.9 percent) higher than July, MY 2013 trucks averaged $29,750, $250 (0.8 percent) lower than July; MY 2012 trucks averaged $29,250, $2,750 (10.4 percent) higher than July. There were no MY 2015 trucks sold at auction in the model.

Year-over-year, J.D. Power writes trucks four to six years old sold in the first eight months of 2018 brought 21 percent more money than the same period in 2017. Additionally, the company states production constraints “seem to be mostly alleviated at the factories, so we expect new truck deliveries to increase going forward,” mean trade-in volume should ramp up significantly.

In the retail market, J.D. Power reports pricing was stable with demand for late-model trucks still comfortably outweighing supply.

The average sleeper tractor retailed in July was 82 months old, had 462,125 miles and brought $53,196. Compared to June, this sleeper was one month newer, had 10,509 (2.3 percent) more miles and sold for $1,451 (2.8 percent) more money. Compared to 2017, this average sleeper was seven months older, had 8,131 (1.8 percent) more miles and sold for $5,606 (11.8 percent) more money.

In the popular three- to five-year-old truck cohort, J.D. Power states average prices last month were as follows:

  • MY 2016: $77,327, $4,531 (5.5 percent) lower than June
  • MY 2015:$63,735, $937 (1.4 percent) lower than June
  • MY 2014: $49,907, $1,597 (3.3 percent) higher than June

Looking year-over-year, late-model trucks sold in the first seven months of 2018 brought 6.1 percent more money than the same period in 2017.

“Depreciation is running 0.6 percent per month in 2018, compared to 1.6 percent last year,” J.D. Power writes.

Looking forward over the short term, J.D. Power writes “the current new truck cycle should remain hot for at least another two quarters. The record-breaking order rate increasingly reflects built slot reservations rather than actual need, but deliveries are still well below the predicted peak.”

The medium-duty market had mixed results last month.

J.D. Power writes in its report that Class 3-4 cabovers average pricing in August was $13,511. This number is $2,040 (13.1 percent) lower than July and $565 (4.0 percent) lower than 2017. Class 4 conventionals averaged $21,275 in August, which was $1,939 (10.0 percent) higher than July and $2,174 (11.4 percent) higher than 2017. Class 6 trucks averaged $19,928 in August, which was $1,211 (6.5 percent) higher than July and $2,710 (15.7 percent) higher than August 2017.

When considering the entire used market, J.D. Power states “OEMs have worked out most of their component shortages, so new truck deliveries should ramp up in the upcoming months. As such, expect trade-in volume to incrementally increase. Still, demand for late-model trucks should outweigh supply into the second quarter of 2019.”

For more information, and to read the entirety of this month’s report, please CLICK HERE.