The commercial truck market appears stable as it heads into the third quarter, according to a recently released report from NADA Used Car Guide. Depreciation has relaxed as buyers and sellers gain familiarity with the new normal of increased supply and lower trade values.
Chris Visser, senior commercial truck analyst at NADA Used Car Guide said, “Average pricing has not decreased much since March. The market is moving away from large-scale, across-the-board depreciation.”
Visser said the supply of sleepers in the retail and wholesale channels is too high, but pricing has largely adjusted to this new normal.”
In the commercial truck wholesale auction channel, three- to five-year-old sleeper tractors have lost an average of 3 percent of their value per month. The drop is notably better than the nearly 5 percent per month drop in the second half of 2015. Analysis in the report forecasts volume to increase mildly in the third quarter, and then fall in the fourth.
In the retail channel, 2014 to 2012 model year trucks lost 12 percent of their value from January to May of 2016. This figure is similar to the 13 percent lost in the same period of 2015. Visser notes absolute pricing is lower this year, with this cohort running 9 percent lower in the first five months of 2016 versus 2015.
Looking forward, Visser said the freight environment has turned moderately negative, but the domestic economy continues to show incremental upward growth. Aside from a mild increase in the number of sleeper tractors returning to the marketplace in the third quarter, there shouldn’t be a notable change in conditions in the short term according to the report.