Used truck prices ended 2021 at the highest level in the modern era

used commercial truck

Used truck prices ended 2021 at the highest level in the modern era

By Dean Croke

Last year was definitely one for the record books. Class 8 retail prices reached the highest level in the last seven years – so far. In the 2021, late model 3 to 5-year-old trucks brought 40.7% more than in 2020, and 21.4% more than in 2019, according Chris Visser at J.D. Power.

Trucks with warranty in the 3-year-old category – a favorite of new owner-operators entering the industry for the first time – brought 96.3% more money year-over-year at auction and 40.7% more at retail. The average price for 2018 year-model trucks sold at auction in December was $95,854, which was 3.3% lower than November but is still just over double auction prices a year ago.

J.D. Power reported higher auction volumes in December were driven by surprisingly strong new truck deliveries, as “companies taking delivery of long-awaited new trucks were probably eager to offload their older inventory.”

Around 280 used trucks were sold at auction in December, which is 44% lower than in December 2020 and 74% lower than the record-high 1,054 trucks auctioned off in June 2020, as the fallout from the pandemic rippled through the truckload sector. December’s auction results did catch some by surprise following the 16% month-over-month drop in the price of 4-year-old used trucks.

A sign that the market is turning?

The average price sold at auction in December was $73,305, which was $13,766 lower than November.

“We don’t consider December’s overall results evidence of a market shift, but we do consider the new truck delivery figure a surprise,” according to Visser.

Wards Intelligence reported 24,717 new Class 8 trucks were delivered in December, which was 38% higher than the 2021 average and the highest-volume month since September 2019. U.S. medium- and heavy-duty trucks finished the year 12.7% ahead of 2020, with only three months of negative sales, withstanding the challenges brought by the ongoing pandemic according to Wards Intelligence.

What’s 2022 have in store for used truck buyers?

Unprecedented freight demand plus manufacturing constraints on the supply side have created a once-in-a-lifetime scenario where carriers can’t add sufficient capacity even if they wanted to. Equipment manufacturers are in the same position – they can’t meet demand for new orders due to labor shortages and lack of parts availability.

“Most analysts predict the status quo through at least the first half of the year,” explained Visser. “Later in 2022, a relaxation of parts shortages and a return towards more typical economic activity could place downward pressure on used truck pricing.”

Strong freight rates hold the key, and while they’re at record-high levels, the used truck market should continue to absorb most of the available inventory, maintaining auction and retail prices at current levels.

Saint George Insurance is proud to partner with DAT to offer a special 30 days free on the TruckersEdge Load Board!

Sign up here: