Value across the majority of truck segments continued to fall in March, with heavy, medium and light duty trucks seeing the largest depreciation levels yet this year.
This development is due in part to the trend of trucks staying in service longer then they have in the past. According to market analysis by Black Book, as more veteran units come into the market with higher miles and more wear and tear than the supply of past years, average depreciation is increasing. And with the average supply of units reaching rougher conditions, the market is starting to look more volatile.
The following data from Black Book indicates the value trends of heavy duty trucks manufactured between 2016 and 2017 from February to March:
- Construction/vocational segment decreased an average of $727 (0.8 percent) in March, compared to the average drop of $264 (0.3 percent) in February.
- Over the road tractor segment dropped an average of $946 (1.2 percent) in March, compared to the average drop of $537 (0.7 percent) in February.
- Regional tractor segment dropped an average of $840 (1.2 percent) in March, compared to the average depreciation of $361 (0.5 percent) in February.
Heavy duty trucks manufactured between 2008 and 2015 saw similar depreciation:
- Construction/vocational segment dropped an average of $276 (0.6 percent) in March, compared to the $158 (0.3 percent) average depreciation in February.
- Over the road tractor segment dropped an average of $244 (0.7 percent) in March, compared to $187 (0.5 percent) average depreciation in February.
- Regional tractor segment dropped an average of $282 (1.1 percent) in March, compared to the average drop of $152 (0.6 percent) in February.
Medium duty trucks also saw increased depreciation at the lowest levels since January. “Auction prices continue a downward trend as demand slows and new and used inventory increases,” says Josh Giles, principal automotive analyst for Black Book.
Late model units (2016-2017) dropped an overall weighted average of $463 (-0.9 percent) in March. This is $144 more than last month’s adjustment of $319 (0.6 percent) and the largest downward adjustment for this segment since September of last year.
Older models (2008-2015) dropped an overall weighted average of $285 (1.3 percent) in March, which is the largest monthly depreciation seen since August of last year. The light-duty truck segment stabilized during March mostly due to the increased demand normally seen during the spring market.
According to Black Book, auction prices over the past couple of months have continued a downward trend as demand in many areas has leveled off, while new and used supply continue to increase.
Units in Classes 6 through 7 have increased in depreciation since the first of the year, and Black Book expects this trend to continue for the next couple of months as new inventory is also helping keep downward pressure on the market.
Fuel prices are also taking a negative turn as prices have increased $0.06 (0.10 percent) in just four weeks.