Manufacturers and others can track new truck sales to the exact unit count, most often using data from Wards Auto. And their near-term forecasts are almost as accurate. But when it comes to used truck sales, there is no single, reliable source for that data.
Instead, the only way to get some sense of how the used-truck market is performing is simply to call around and talk to buyers and sellers. And when the overall economy is as unsettled as it is now, the picture that emerges is fairly blurry, beyond some general outlines.
Earlier this fall, our sister publication The Truck Blue Book held its annual workshop, providing a good opportunity to compile a composite picture of the market by drawing on as many different sources of anecdotal information as possible. The consensus from workshop attendees — mostly used truck dealers and large fleets that retail their own used equipment — is that “inventories are backing a bit,” says Terry Williams, editor of The Truck Blue Book.
“You can't really get good numbers [for used truck sales], but people reported that they're seeing activity down a bit, but not dramatically, through July,” Williams says. Pricing is also down slightly and financing has become a bit more difficult, “but no one is panicking or in crisis mode,” he says.
Traditionally styled Class 8 tractors with low mileage are always in short supply and still commanding strong prices from owner-operator buyers, according to Williams, while medium-duty is seeing the largest inventory buildup.
“I think medium-duty inventories are tracking a bit higher because most of the used buyers there are small businesses, the types that are getting caught in the current consumer spending decrease,” he says.
As for next year, workshop attendees expect to see a fairly significant increase in pre- and post-2002 high-mileage tractors as fleets begin freshening fleets with new equipment ahead of the next emissions roll-back in 2010, he reports. “As usual, though, there will be a shortage of late-model low-mileage trucks,” Williams says.
As president of a used-truck wholesaling company — Wholesales Trucks of America — and vice president of the trade organization Used Truck Assn., Al Hess also has a good feel for conditions in the marketplace. In his opinion, exports are currently driving sales in the used-truck market, just as they are in new-truck sales.
“Nobody tracks used trucks numbers, so I can't tell how many [used trucks] are going to the export market, but I do feel [used-truck sales] would be in some trouble without it,” Hess says.
Eastern Europe is the primary destination at this point, buying late-model heavy trucks in high numbers. “I have no proof, but I suspect it's a combination of the weak dollar and that their economies are expanding now,” he says.
Domestically, dealers Hess has talked to tell him that while the market is off somewhat, the business they do have is good. With the economy slowing and freight soft, repossessions have reappeared, which is making lenders cautious and tightening credit a bit, “but really there are no surprises out there right now,” according to Hess.
As for the medium-duty market for used trucks, “It's always been Joe Steady, but it isn't right now,” says Hess. Inventories are high and there is no export market for medium-duty trucks to help absorb that inventory. “If it's not a low-mileage vehicle, dealers don't want to take a chance on them, especially smaller dealers,” he says.
Earlier this year, observers were forecasting an increase in used truck sales for the last half of the year. “We're still expecting a pickup, but we thought it would have started by now,” Hess says. “We are seeing some increase in fleet [buying] activity just now, but is that the beginning [of the forecast pick up]? I just don't know yet. Overall people tell me they're doing business right now and that they have a market, just not a great market.”