Late model used truck depreciation hits double digits

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Commercial Carrier Journal (CCJ)  /  June 15, 2016

Values of used trucks continue to fall according to data released this week by American Truck Dealers (ATD).

Year-to-date trends show model year 2013 Class 8 sleeper tractors have lost about 13 percent of their value ($36,500 average), model year 2012 lost about 18 percent of their value ($35,659 average) and trucks from model year 2011 have lost about 11 percent ($28,750 average) on the wholesale market.

“These figures translate to retail pricing continues to catch up to wholesale, with the market sticking to our depreciation forecast of 4 to 5 percent per month,” Chris Visser, senior analyst and product manager, commercial vehicles for J.D. Power, says. “That’s not a bad decline given the major changes the market has seen over the past year, and better than the 4.7 percent average monthly loss in the second half of 2015.”

Year-to-date, sleepers three to five years of age are retailing for $8,626 less than in the first four months of 2015, and fell 4.2 percent in April from March.

Due to the lower volume of 3 to 5 year-old trucks, the average age of trucks sold in April jumped to 93 months — 11 months higher than March.

“Trucks of model year 2012 have fared the worst in 2016 to date, losing 21.8 percent of their retail value from January to April,” Visser adds. “In the same period of 2015, that age group had lost only 4.5 percent. This past April was likely an outlier though, as an unusually large group of retail Freightliner Cascadias sold at a price typically brought in the wholesale market.”

Trucks three and four years of age fared better, with 2014’s losing 2.3 percent of their value, and 2013’s gaining 0.7 percent month-over-month.

The Kenworth T660 gained ground for the second month in a row, moving upward in 2013, 2012 ad 2011 model years.

Related reading (beginning on page 8) - http://uta.org/wp-content/uploads/2016/04/UTA-APRIL2016.pdf

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Truck depreciation jumped in 2016, forecast flat for 2017

Commercial Carrier Journal (CCJ)  /  February 15, 2017

Monthly depreciation of trucks jumped .7 percent in 2016 versus the year before, according to J.D. Power and Associates data released Wednesday. Monthly retail depreciation for 3 to 5 year old trucks averaged 1.9 percent in 2016.

In terms of dollar value, J.D. Power commercial vehicle senior analyst and product manager Chris Visser says the average 3- to 5-year-old sleeper brought 12.5 percent less retail money in 2016, which translates to a loss of $8,803.

“This difference is substantial, but notably smaller than the drastic 30 percent year-over-year change in auction pricing for these same trucks,” he adds.

Through the auction channel, Visser notes, 3- to 5-year-old trucks lost about $16,500 of their value from January to December 2016– about 33 percent for the year or about 2.75 percent per month.

“[That is] slightly better than our early forecasts of 3 percent to 5 percent per month,” he says.

Model year 2014 trucks lost about 25 percent over the course of last year at auction, while model year 2013 trucks lost about 34 percent, and 2012 model year trucks lost about 37 percent.

Visser says that based on new truck delivery numbers over the past five model years, there is a potential 8.1 percent increase in the number of 3- to 5-year-old sleepers returning to the market in 2017 compared to 2016 and is forecasting a continuation of the 2 to 2.5 percent per month depreciation for Class 8 sleeper tractors.

“Retail should perform moderately better than wholesale,” he adds. “There should be more trucks returning off trade this year compared to 2016, which should counteract any increase in demand.”

“It is likely that OEMs are already stockpiling some quantity of these trucks, keeping them out of the marketplace until conditions potentially change,” he adds. “On the upside, new truck order activity was on the higher end of expectations in the most recent two to three months, and the volume of used trucks sold rose unexpectedly in December.”

Visser says these factors suggest there may have been some pent-up demand in late 2016 as buyers waited for the presidential election.

“Business interests are also probably encouraged by the likelihood of tax reductions and regulatory rollback under the new administration,” he says. “If true, these factors provide some optimism for the demand outlook. On the other hand, renegotiation of trade deals points to inflation and increased costs. Overall, we are cautiously optimistic about demand for used trucks in 2017, with the understanding supply will remain the overarching factor in prices.”