The used truck market today is much more complicated than in the past, relative to the factors that drive activity and pricing.
While the price of used sleeper tractors has cratered, the reality is they had unbelievably appreciated as a result of past supply chain issues. At one of their highest points — the middle of 2020 to the end of 2021— a five-year-old sleep tractor with half a million miles on it was selling for $80,000 to $90,000. Today, that same truck is worth $55,000 less.
Prices for used day cabs have dropped significantly as well (falling by half) and the price for used trailers has taken a big hit.
The prices of used sleeper tractors, day cabs and trailers are close to historicly low levels. However, it is also important to remember that the prices for new equipment have grown by approximately 30% in the past few years.
At the end of the day, the used truck market is driven by freight demand, truck utilization and orders for new trucks. However, because of supply chain issues, truck manufacturers were not able to meet rising demand for new trucks, which is why used truck prices skyrocketed during the COVID-19 pandemic and post-pandemic.
Truck manufacturers are ramping production back up, but indications are that they are looking to balance out what has historically been a very cyclical new truck market and are focusing on more level production year-to-year.
An additional factor that has been negatively impacting the used truck market is the price of fuel. Fluctuating high fuel prices in concert with the drop in short-term spot rates severely damaged these independent businesspeople. The math simply did not work for them. So, when diesel went from $4.25 a gallon to $5.25 a gallon, and they did not have surcharge agreements to offset the increase, it forced many to exit the market and further reduced demand.