Have you noticed there are not as many dealers calling you for your used trucks as there were the last three or four years? Did you notice that more dealers are low-balling you for your trucks? Are they demanding improved conditions of sale? Well, this is happening to fleets all over the country.
This is not happening due a deteriorating economy. This is all part of a significant change in the supply-and-demand model that occurred in the very low build years of 2008-2010, which created a significant used truck shortage in 2011-2014 and greatly increased used pricing. (See chart.) Due to the much higher volume build years in 2011-2014, we are now seeing significantly higher volumes of equipment entering the used market. Used trucks are a commodity and, therefore, follow the basic economic pricing rules of supply and demand. Demand has not gone down, thank goodness, but the supply has gone way up.
Please note the Class 8 sales chart for the last 10 years:
As you can see, the new sales volume remains consistently high or growing. This means the pricing trend or correction will continue to expand, provided the economy, tonnage, and volume stay consistent. If they were to falter, then this correction could be greatly extended. This may be the right time to re-check your depreciation schedules and residual estimates for your future fleet, as it is quite likely prices will be lower next year, and so on.
Obviously, everyone wants to continue to update their fleet and keep fleet aging balanced and their running cost manageable. In order to update with new trucks, you must find homes for your used ones. In this type of market, it is essential to stay very sensitive to the most current market pricing and to stay ahead of general price reductions. If you are just reacting or chasing down prices in this over-inventoried market, you will be less likely to sell your fleet in a timely manner.
Other important items to remember when selling used equipment:
- Clean trucks sell before dirty trucks
- Trucks in best mechanical condition sell first
- Trucks with better specifications sell first
Trucks with dripping fluids, showing engine codes, worn tires, worn brakes, unadjusted clutches, cracked and chipped windshields, torn upholstery, missing knobs, broken switches, and having dirty, smoky odors will sell last. Remember, you are now competing in a market with an overabundance of choices. Customers will take their time and compare all trucks available. They will choose the units with the best specs, in the best condition, at the lowest miles, at the best prices listed, and then come back and negotiate hard on those competing trucks.
Finally, make sure you use the best resources to advertise and solicit your used trucks. AmeriQuest Remarketing Services, Inc. serves AmeriQuest members to provide the highest returns in used truck sales.
For questions or if you desire a used truck evaluation of your fleet, please contact AmeriQuest Vice President of Remarketing, Dale Tower.