[su_box title=”The auction prices for the first two months of Q2 show steady declines in pricing for heavy trucks as age progresses while medium duty shows a much less consistent trend. ” box_color=”#ddd” title_color=”#000000″][/su_box]
Key Takeaways for Decision Makers
BUYER/SELLER: Selling on the auction market tends to bring much more variability on medium duty pricing than heavy duty, which is highly likely caused by the larger volume of heavy trucks.
FINANCE/INSURANCE: When evaluating the retention rate of a truck, the correct MSRP is incredibly important due to inflation in original prices year over year.
With two months of Q2 complete, the commercial truck auction market is showing much less variability in pricing than it did in April alone. Certain model years are showing much higher prices on the auction market than the retail market as well. Utilizing the MSRPs provided by manufacturers to power the Truck Blue Book, it was found that medium and heavy duty trucks show the largest drop in price retention within the first three years on the auction market. The largest drop in retention rates for heavy duty trucks is currently between the 2013 and 2012 model years, which is the same as what is happening for the medium duty trucks. Currently the 2013 medium duty truck models are selling at a higher price than the 2014 models thus retaining a higher percentage of their original value, which caused the spike that you can see in the graph.
Given that the average truck MSRP increases each year due to various economic factors, trucks are able to retain a higher percentage of their original value despite being an older model. For example, for heavy duty trucks on the auction market in Q2 the average 2008 model sold 16% higher than the 2007 models. Despite the higher price on 2008’s, the 2007’s retained 37.5% of their original value while the 2008’s only retained 33.7%. This was solely due to the 29% price gap between the original 2008 and 2007 prices. This is also occurring on the medium duty market between the 2012 and 2014 models. Due to the much higher MSRPs on 2014 models the 2012’s are currently retaining a larger percentage of the original value.
There are a few spikes in prices between model years as well. The heavy duty trucks show a price increase on the 2010 models currently selling at auction over the average 2011 model. The medium duty trucks show even more model year price jumps. The 2010 models were selling much lower than many of the other model years which then reversed to an increase in price to the 2009 and 2008 models. Currently, medium duty 2008 models on the auction market are showing average prices higher than even some of the 2011’s. For example a 2009 International 4300 went for only $8,600 while a 2008 went for $19,000. This goes to show how condition and mileage plays an integral part in the auction market and original prices can impact price retention.
[su_note note_color=”#EEE” text_color=”#555″]Interested in model specific truck valuations? Request a live demo today. [/su_note]