Used truck prices fell about 4% a month in the first 10 months of the year. But the rapid rate of depreciation might be coming to an end.
“The past three months’ less-than-expected declines present mounting evidence of pricing stability,” said Steve Tam, ACT Research vice president. “We expect lower prices through the end of 2023, with a return to month-over-month growth toward the end of 2024.”
J.D. Power Valuation Services found month-over-month auction prices for the typical Class 8 sleeper truck fell in four of five model years. Trucks from the 2020 model year bucked the trend.
Four-to-6-year-old trucks sold for 4.6% less than in September. They priced out at 37.5% below capacity-constrained values in October 2022, Power reported in its November Guidelines newsletter. In the first 10 months of 2023, late-model sleepers sold for 41.7% below the historically inflated gavel prices in the same period of 2022.
Prices getting close to strong pre-pandemic period
Monthly depreciation in 2023 is averaging 4.4%. Values for the newest used model years available are just below the strong pre-pandemic period of 2018 or just over 20% lower when adjusted for inflation.
“The universal average was dragged down this month by weak selling prices of trucks older than four years of age,” said Chris Visser, Power director of specialty vehicles.
In October, the average sleeper tractor sold at retail was 71 months old, had 437,227 miles and sold for $67,441. A month earlier, the average sleeper was four months older, had 20,547, or 4.9%, more miles and sold for $4,240, or 5.9%, less.
Retail selling prices for individual makes and models showed newer truck prices were essentially flat month over month. Older trucks with high mileage for their age exhibited stronger depreciation.
“One month is not a trend, but any relaxation of depreciation would logically show up first in newer trucks, so cautious optimism is not out of the question,” Visser said.
‘Too many trucks chasing too little freight’
Used truck prices soared as lingering effects of supply chain disruptions slowed production of new trucks. Fleets held on to their equipment longer, starving the secondary market of all but the most heavily driven, older trucks.
Newer used equipment sold for historically high prices as the number of Department of Transportation trucking authorities swelled to match record spot and contract per-mile rates. The freight slowdown has reversed both situations. Used trucks are in ample supply. Many newer or returning drivers gave up their authorities and signed on with for-hire carriers or took other jobs.
“There are still too many trucks chasing too little freight,” ACT’s Tam said. “Until the economy can strike a balance between those two factors, downward pressure on pricing will continue. Once the excess capacity is absorbed, the freight rate environment and trucker profits will correct, restarting the cycle that is the commercial vehicle industry.”
Power reported slow pre-holiday demand, but firmer prices for newer sleeper tractors provides some optimism going into December.
“We’re still looking at the second quarter of 2024 for the post-pandemic correction to finish playing out, although we could be mostly there by February or March 2024,” Visser said.
“We expect lower prices through the end of 2023, with a return to month-over-month growth toward the end of 2024.” J.D. Power Valuation Services found month-over-month auction prices for the typical Class 8 sleeper truck fell in four of five model years. Trucks from the 2020 model year bucked the trend.
Pickup trucks today are significantly more expensive than in the past, with certain newer models exceeding $100,000! This surge in price has prompted many to speculate why these vehicles now command such high values. People point to inflation, a high consumer demand, and modern day technology.
Another reason that used pickup trucks cost a pretty penny is because the body parts are more costly and reliable than those on sedan and coupe cars. Used trucks require the use of heavy-duty materials to ensure durability, which also increases the overall price.
The higher the demand for a particular make and model, the more slowly it may depreciate. Larger vehicles are typically safer than smaller cars, which helps explain why trucks tend to hold their value longer.
Trucks are built to be durable, which gives them a high resale value. And demand from fleets and individuals who need trucks for their job can outstrip supply. If used trucks aren't that attractive of a proposition, you might as well buy a new one.
With the arrival of 2024 models and the presence of numerous 2023 models still on dealer lots, it's likely that truck prices will continue to decline in the coming months. It's finally a buyers market, at least for educated truck shoppers.
Between 2019 and 2020, prices rose 5%. Then, average new car prices spiked — by 17.2% — between 2020 and 2021. Similarly, the average car payment for new vehicles rose 11.8% to $644 in 2021.
The 100,000-mile mark is often cited as the point at which you should no longer consider purchasing a used truck. But there are plenty of trucks that'll last for a lot longer than this. In fact, it isn't uncommon at all for well-maintained trucks to last between 200,000 and 300,000 miles these days.
The rule of thumb is "If you drive more than 25,000 miles a year and will need a truck for at least 5 years, buy new". A used truck on the other hand can be the best & most cost effective solution in a variety of situations. A quality 4 to 5 year old truck will typically cost 40 to 60 percent less than when it was new.
Among these contenders, heavy-duty models dominate the field, but notable names like the Toyota Tundra, Toyota Tacoma, Chevrolet Silverado 1500, and Chevrolet Avalanche also boast a higher-than-average likelihood of crossing the quarter-million-mile mark.
Toyota Tacoma. If you're looking to sell your Toyota Tacoma down the road, you'll be delighted to know that it's one of the top trucks with the best resale value — and for several years at that. ...
"Simply put, cars have become more expensive," Joseph Yoon, consumer insights analyst at car consumer guide Edmunds—an online resource for cars inventory and information—told Newsweek. "In November 2019, the average transaction price for a new vehicle was $38,500. In November of 2023, that figure jumped to $47,939."
However, based on the search results, it appears that West Virginia is considered the cheapest state to buy a truck from a dealer, while Connecticut is the cheapest state to buy used trucks [1].
As pickups transitioned from workhorses to lifestyle vehicles, their design shifted accordingly: Cabs expanded to accommodate more passengers, while beds shrank. The first generation of F-150s was 36% cab and 64% bed by length. By 2021, the ratio flipped, with 63% cab and 37% bed.
GM and Nissan Motor Co. were the only automakers to sell more pickups than in the first quarter of 2023. Total pickup sales fell 6.4 percent, including a 31 percent plunge for midsize nameplates.
Introduction: My name is Kerri Lueilwitz, I am a courageous, gentle, quaint, thankful, outstanding, brave, vast person who loves writing and wants to share my knowledge and understanding with you.
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