J.D. Valuation Services has listed its numbers for used Class 8 auctions in October. The numbers will not be surprising to anyone who has been paying attention to the trucking industry this past year, as a reduced supply and increased demand mean higher prices. Unlike the month prior, where some model years appreciated and others depreciated, all five years increased in October.
- Model year 2018: $85,057 average; $1,248 (1.5%) higher than September.
- Model year 2017: $69,449 average; $6,974 (11.1%) higher than September.
- Model year 2016: $64,837 average; $6,045 (10.3%) higher than September.
- Model year 2015: $44,520 average; $3,636 (8.9%) higher than September.
- Model year 2014: $34,618 average; $3,563 (11.5%) higher than September.
Whereas in September there was a trend of older models losing value, this time around newer models are increasing at a much slower rate than older models.
The current truck market is going on a bit of a logistical spiral. With new trucks being built at a rate much, much slower than they can be sold, carriers are looking to the used truck market to fulfill their needs. This increased demand for used trucks is only causing prices to rise.
What is up for discussion is whether or not there is currently a “run” on used trucks. In normal economics, an increase in price results in fewer purchases, but when public opinion involves people being terrified of scarcity, sometimes higher prices will make people buy sooner and more, in fear of paying higher prices later on than were they to purchase now.
We are in quite an anomalous time in regards to trucking, conventional wisdom is that as trucks’ parts wear and tear and the truck needs more constant maintenance to run properly, the price of trucks rising is outpacing not only the rate of inflation, but depreciation. Theoretically, a Wall Street investor could have bought an enormous number of 2018s in January and made off like a bandit.
This is not to say that trucks are investment speculation tools, but it highlights just how crazy the market is right now.
It is impossible to say how long this streak of rising prices will last. It is safe to say that the coronavirus pandemic is mostly over due to significantly lower death rates than when it began, but the economic fallout from the pandemic may have just begun.
If you are in the market for a used truck, it may be a good decision to purchase as soon as possible to avoid even higher prices. If you would agree with this sentiment, TopMark Funding can help get you the financing you need. Read below for more information.
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