The used-truck market tallied another win in August as inventory fell in some categories, although depreciation remains a challenge.
The second straight month of inventory declines signal stability in an industry that’s been reeling for several years amid decreased consumer spending, overcapacity and record-high operational costs, Sandhills Global Equipment Lease and Finance Manager Jim Ryan told Equipment Finance News.
“We’ve really been in this stable mode for the past few months now,” he said. “You’re going to see your inventory levels and your values maybe go up or down within 5%. That’s just the nature of the beast when you’re dealing with this much inventory. … But let’s be real, that’s a lot better than where we came from.”
While used-truck inventory dropped in some sectors, prices fell across the board in August, according to Sandhills Global’s monthly report on heavy-equipment trends, released Sept. 5.
Used heavy-duty trucks
- Inventory fell 3.9% year over year and 2.8% month over month in August;
- Asking values declined 17.2% YoY and 1.2% MoM; and
- Auction values were down 18.4% YoY and 0.6% MoM.
Used semitrailers
- Inventory rose 28.5% YoY and 1.9% MoM;
- The dry van trailer category saw the largest inventory jump at 50.8% YoY;
- Asking values fell 18.4% YoY and 2.7% MoM; and
- Auction values dropped 18.5% YoY and 3.8% MoM.
Used medium-duty trucks
- Inventory rose 11.3% YoY but fell 4.6% MoM;
- Asking values were down 16.8% YoY and 2.5% MoM; and
- Auction values declined 24.2% YoY and 3.5% MoM.
Low prices spotlight rate cuts
While the trucking industry isn’t generally considered interest-rate sensitive, low prices may accentuate the Federal Reserve’s expected rate cut this week, Matt Manero, president of Carrollton, Texas-based Commercial Fleet Financing, told EFN.
Reduced truck prices have allowed businesses to “absorb or mitigate the interest rate hike by keeping loan and lease payments close to or lower than they would have paid in a lower-rate, higher-truck price environment,” Manero said. “However, if you lower rates on top of the lower truck prices, you give business owners an even larger break on their monthly payments, which helps them more easily manage cost spikes in the other areas of the business operation.”
Manero said the trucking industry isn’t “completely out of the storm” after a yearslong recession but he fully believes that 2025 will be better than 2024. The consumer market will ultimately drive the recovery, he said.
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