Used Class 8 truck retail sales surged in July despite summer slowdowns and the ongoing freight recession.
Used Class 8 retail sales rose 32% year over year and 38% month over month, according to a report from ACT Research released today. That followed four consecutive months of declining retail sales. For June, retail sales were down 17% YoY and 16% MoM.
“Despite slow freight and freight rate improvement and falling, but elevated, interest rates, the buyers’ market remained attractive to quite a few truckers,” ACT Research Vice President Steve Tam stated in the report. “Seasonality called for a decrease of about 2% MoM.”
July sales numbers support recent data suggesting that the trucking industry is starting to climb out from the depth of the recession which was triggered by decreased consumer spending and higher operating costs. While the industry isn’t typically considered interest-rate sensitive, reduced rates by the Federal Reserve could boost the recovery, Tam told Equipment Finance News.
“If carriers can reduce their costs as a result of lower interest rates, that’s going to do one of two things: It’s either going to improve their margins or, from an equipment perspective, it may be a catalyst for them to go out and increase their capital expenditures,” he said.
The average retail price for used Class 8 trucks reached $55,900 in July, up 3% MoM but down 20% YoY, according to the ACT report. In June, prices were down 7.6% MoM and 20% YoY.
The average age of used Class 8 trucks being sold fell 3% MoM and 1% YoY in July, while average mileage declined 2% on both a MoM and YoY basis.
Excess used inventory a challenge
The elevated inventory level is keeping pressure on used-truck prices, Tam said.
Looking ahead, mounting inventory remains a challenge as the industry works to bounce back, Matt Manero, president of Carrollton, Texas-based Commercial Fleet Financing, told EFN.
“You really do have an overcapacity in the marketplace. You have too many truckers going after not enough freight,” Manero said. “And the only thing that happens then is freight rates go down. And freight rates are to a point where some people have to decide if it’s literally worth staying in the trucking business or not.”
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