This comes from preliminary data on used-truck activity for October published by ACT Research. The researchers noted that sales involving used Class 8 trucks – trucks with a gross vehicle weight rating exceeding 33,000 pounds – improved by 34.5 percent compared with a year earlier, with this year's sales numbering 22,863 compared with the 17,002 recorded a year earlier. (Related: Used truck auction prices drop as more truckers abandon their vehicles and leave the industry.)
Three-to-six-year-old trucks sold for an average of 2.8 percent less in October compared to last month and 20.8 percent less compared to Oct. 2021. The current depreciation rate is 5.6 percent per month on average.
Late-model trucks in the first 10 months of the year sold for an average of 41.6 percent more than during the same period of 2021, but current trends show that used truck prices are still dropping.
Despite the drop in prices, used Class 8 truck sale volume in October dropped by 10 percent compared to September and 30 percent compared to October of last year. Retail prices also averaged one percent higher month-over-month, but ACT believes this heightened retail price is an anomaly rather than a reversal of the decline reported in the past few months.
"As the OEMs [original equipment manufacturers] have continued to make incremental progress on overcoming supply chain constraints, marginal improvements in output have logically followed," said ACT Research Vice President Steve Tam.
J.D. Power's current projections expect downward pressure on used truck prices to continue into 2023. Other firms, like medium- and heavy-duty truck manufacturer Paccar Inc., believe the drop in used truck prices represents a big boon to the industry in the long-term despite the potential short-term loss in profits, as the lower prices mean more models sold.
"Regardless of the part of the cycle we operate in, we tend to get that premium," said Paccar CEO Preston Freight during the company's third-quarter earnings call. "We continue to take advantage of the opportunities of selling more retail and that has helped the business in the long term."
Alan Adler, writing for FreightWaves, noted that thousands of Americans purchased used trucks during sky-high prices and spot freight rates. Now, both are falling, with contract rates falling right behind them, and many of these new truckers are feeling buyer's remorse.
"The chase for $4-a-mile loads is history," he wrote. "Scores of drivers who reactivated their Department of Transportation authorities are surrendering them and joining for-hire carriers or leaving trucking altogether."
Chris Visser of J.D. Power Valuation Services noted that, despite falling used truck prices, it will still take a while before the prices return to their pre-2020 levels. But he does predict prices to keep dropping.
"Looking at supply, the new truck backlog is still considerable, but deliveries have been above a historically typical 20,000 per month since March," he wrote in the company's November newsletter. "Delivering this volume of trucks into a correcting freight environment means we can expect more trades and depreciation going forward."
Learn more about America's fragile supply chain at SupplyChainWarning.com.
Watch this clip from Next News Network discussing how President Joe Biden's diesel shortage is hurting truckers.