Record setting used heavy truck demand from 2014 is expected to spill over into at least the first half of 2015.
According to Chris Visser, senior analyst and product manager, ATD/NADA Official Commercial Truck Guide, new truck orders were “through the roof” in the fourth quarter, and most of these trucks will be delivered in the first half of this year.
“That means increased trade-in activity,” he says. “As such, expect continued expansion of supply.”
The increased availability of 3- to 5-year-old units pushed average pricing up by approximately 7.5 percent year-over-year according to Visser, while average mileage was about 4.5 percent lower. Average age has remained similar, at 75.6 months in 2014 vs. 76.5 months for 2013.
“Late-model used iron was and will remain a compelling alternative to new trucks, thanks to the steadily-increasing price of new iron,” he adds. “At just under $60,000, the average used sleeper tractor with 450-500,000 miles is less than half the price of a new truck.”
Visser says the strong demand for late-model trucks since the economic recovery began will continue in step with the improving economy.
“The proportionally higher price of new trucks has caused a permanent shift in dynamics further supporting this increased demand,” he says. “In terms of actual selling prices, year-over-year comparisons will appear less impressive as price increases level out. In real terms, pricing will remain at record levels.”
One major development in 2014 was the increasing supply of International ProStars entering the market. In November, Visser says ProStars comprised 27.7 percent of all 2012 to 2010 model-year sleeper tractors reported sold. Previous months were more in line with International’s expected market share, averaging 15.1 percent if November is excluded.
“In general, the underperforming selling prices of this model negatively impacted our averages,” Visser adds. “What we are seeing is the model year mix of available trucks adjusting back to normality. More specifically, we’re seeing the end of the outsized influence of 2007 model year trucks. Through late-2012, trucks of this vintage dominated the market. Once the supply of low- to average-mileage 2007’s started to dry up, the model year mix started to balance out.”
The retail channel is dominated by 2010-2012 model year trucks, as opposed to the 2007-2010 model years this time last year, Visser says.
“This means that the mix of available used trucks is essentially two full years younger than in 2013,” he adds. “This trend reflects the disappearance of desirable 2007 models as well as the shift back to shorter trade cycles following the recession.”