Retail pricing came in better than expected in February. Any negative month-over-month averages were driven more by a mix of trucks with higher mileage than a real decline in value of individual trucks. As with the auction channel, we feel the market woke up in February. A mild winter combined with a temporary surge in freight demand were probable boosts.
The average sleeper tractor retailed in February was 70 months old, had 464,568 miles, and brought $45,393. Compared to January, the average sleeper was 1 month newer, had 8,289 (1.8%) fewer miles, and brought $220 (0.5%) less money. Compared to February 2019, this average sleeper was 1 month older, had 5,960 (1.3%) more miles, and brought $10,424 (18.7%) less money.
Looking at trucks two to five years of age, February’s average pricing was as follows:
Model year 2019: $104,453; $4,892 (4.5%) lower than January
Model year 2018: $88,561; $427 (0.5%) higher than January
Model year 2017: $63,382; $60 (0.1%) higher than January
Model year 2016: $44,792; $5,921 (11.3%) lower than January
Month-over-month, late-model trucks brought 2.6% less money. In the first two months of 2020, pricing averaged 11.9% lower than the same period of 2019. Depreciation is averaging 2.6% per month so far this year, notably better than the second half of 2019, and not far from what we consider historically typical.
Looking forward, obviously the Covid-19 outbreak has thrown a monkey wrench into every economic forecast. Until we get a better feel for the severity of the infection rate, the best we can do is speculate on the most likely scenario. With that in mind, widespread shutdowns and quarantines mean the broad economic pullback that has already started will continue through the next couple of months. When the pandemic starts to recede, probably in the 3rd quarter, we should see some catch-up activity. Many measures will probably not return entirely to pre-Coronavirus levels. We’ll leave it there for now.