J.D. Power: Auction market stable, used truck sales per dealership climb somewhat

Image: Jim Allen/FreightWaves

Image: Jim Allen/FreightWaves

Some highlights from this month's J.D. Power Commercial Truck Guidelines industry update:

Volume at auction on the rise

The number of trucks sold at auction rose moderately in February, which the report called a “encouraging data point” for a month without many auctions on the calendar. Pricing trended lower, but J.D. Power analysts pointed out that the volume of newer trucks was also low. The average auction price of 2016 model year trucks came in at $46,300, 10.8 percent lower than January.

The average auction price of 2015 model year trucks came in at $39,600, 1.2 percent higher than January. Prices for model year 2014 trucks dropped 3.8 percent last month. Prices for model year 2013 trucks dropped 7.1 percent, and prices for model year 2012 rose 0.9 percent.

No sales were reported for model year 2011 trucks in February.

Year-over-year, J.D. Power reports trucks 4-6 years old brought in 5.8 percent more money over the first two months of 2019 than during the same period last year.

“Going forward, expect year-over-year comparisons to look less impressive this year because the market was strong for all of 2018,” the report reads. “We expect that strength to continue into at least the second quarter.”

Retail sector sees drop in pricing

J.D. Power reported that more buyers showed up at dealerships in February, and the most desirable trucks continued to sell at strong prices. However, higher mileage trucks and trucks with less desirable specs continued to lose value.

The average class 8 truck retailed in February was 69 months old, had 470,528 miles and brought $55,817, according to the report. Compared to January, the average truck was one month newer but had 0.7 percent more miles and brought 1 percent less money.

Year-over-year, the average sleeper sold at retail was exactly the same age, had 2.7 more miles and brought 14.9 percent more money.

Prices dropped 4.3 percent for model year 2017 trucks, 7.3 percent for model year 2016 trucks and 5.4 percent for model year 2015 trucks.

“The month-over-month drop in average pricing is due mainly to an increased number of trucks with less-desirable specs and mileage sold in February,” the report reads. “Individual trucks did not lose an appreciable amount of value.”

Year-over-year, J.D. Power reports late-model trucks brought in 13.2 percent more money over the first two months of 2019 than during the same period last year.

Sales per dealership hold steady

Class 8 truck sales per dealership climbed to 4.3 in February, a 0.4 truck increase over January.

Sales activity continued to take a hit from the limited supply of late-model, low-mileage trucks, according to the report.

Demand on the decline

The report suggests delivery of new trucks will remain strong into the second half of the year, but demand is expected to continue to decline as supply of new trucks grows.

New truck orders were subdued in February, which is in line with expectations following last year’s boom.

“The lead time for new trucks is still healthy, although cancellations continue to rise,” the report reads. “This is typical behavior at the end of a boom cycle. Economic factors that determine freight volumes, such as consumer spending, manufacturing activity and imports and exports, will determine how much used truck pricing will be impacted by the increased volume of trades.”

The next J.D. Power update is expected to be released mid-April.