In normal times, pricing trends in the retail market usually lag the auction market by roughly 3-5 months. In our current environment, trucks in both channels are losing value fairly rapidly, although retail pricing might not be falling quite as sharply as auction pricing.
Looking at the retail market, the average sleeper tractor sold in March was 69 months old, had 454,887 miles, and brought $44,342. Compared to February, the average sleeper was 1 month newer, had 4,676 (1.0%) fewer miles, and brought $1,051 (2.3%) less money. Compared to March 2019, this average sleeper was identical in age, had 12,434 (2.7%) fewer miles, and brought $11,462 (20.5%) less money.
Looking at trucks two to five years of age, March’s average pricing was as follows:
Model year 2019: $105,441; $988 (0.9%) higher than February
Model year 2018: $83,484; $4,889 (5.5%) lower than February
Model year 2017: $60,076; $3,719 (5.8%) lower than February
Model year 2016: $42,255; $2,537 (5.7%) lower than February
Month-over-month, late-model trucks brought 5.7% less money. In the first three months of 2020, pricing averaged 11.5% lower than the same period of 2019. Depreciation in the first quarter averaged 2.7% per month, but this figure will have undoubtedly increased by the time you read this.
Auction results from the second half of March and especially the first week of April declined sharply from earlier periods. This should surprise no one. We took a relatively conservative approach to devaluation in our published values, but even still some trucks saw declines of up to 20% from March to April. Even this appears to have been light in some cases, so our April wholesale values may be higher than current auction results for selected trucks. We are of course watching pricing very closely and making updates as frequently as our systems allow.
Looking forward, we see used truck pricing recovering roughly in step with the gradual re-opening of the economy. This means the auction market should see some firming in the summer, followed by mild to moderate increases in the fall and into 2021 (with some pauses here and there, particularly in October and November). Unfortunately this means we have decreased our Retail Value Forecast for 2020. Again, none of this should be a surprise. We’re looking forward to the day when we can revise our published values upward instead of downward.