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The Long Slow Ride: Commercial Truck Depreciations Converge with Age

This graphic depicts the age depreciation in used truck values by size class comparing the sleeper and non-sleeper cabs within heavy duty. Light duty includes GVW 0-14,000, Medium: 14,001-26,000, and Heavy: 26,001+.

Key Takeaways for Decision Makers
FINANCE/INSURANCE: Truck depreciation rates for the past 20 years of age begin to plateau and show minimal year over year changes.

FINANCE/INSURANCE: Majority of price changes are going to occur between ages 2 through 8 for medium and heavy duty trucks.

Determining the appropriate age of a vehicle to buy greatly depends on depreciation rates and differences in value between model years. The greatest drop in price between years for trucks is typically within the first four years of the truck’s life cycle. Model years ranging between 2015 and 2011 show the largest price gap. This depreciation curve begins to plateau closer to the 17 year mark with a bit of fluctuation until 19 years, where the average price of all size class trucks show minimal changes in price between years. Despite the differences in original prices for heavy, medium and light duty trucks, as the trucks depreciate over time the price gap between the three size groups dwindles. By 24 years of age, the sleeper and non-sleeper heavy duty trucks value almost identically. Given that the heavy duty trucks begin at a higher price, their depreciation rate is much larger.

Within the first year of aging, only the light duty trucks show significant drops in pricing before quickly picking up the pace with even larger decreases between ages 2 and 8. Medium duty trucks do not see significant price depreciation until age 4 back to age 11 of the vehicle. Additionally, there are quite a few differences in price trends between sleeper and non-sleeper heavy duty trucks. Non-sleepers begin to see large drops from age 3 back to age 8, while the sleeper trucks have a much broader range which start at age 2 going back to age 11. The medium and heavy duty non-sleeper trucks begin to show a steady depreciation rate around age 15 while the heavy duty sleeper trucks pick up again at age 13. The sleepers do not begin to see a lower depreciation rate until age 18. Within the first 20 years of aging, the largest drop in average pricing was between 14 and 15 years of age for light duty trucks while medium duty sees the highest drop at age 6. While most of the age pricing trends do not follow identically between sleeper and non-sleeper heavy duty trucks, they both see the largest drop in pricing between 2 and 3 years of age. There are many influencing factors that go into the pricing calculation; these include specifications on the models, such as technology upgrades, as well as fuel type and price. The economy will have a large impact on the number of trucks on the market as well as how long an owner is using the truck before selling. This accompanies the average mileage on the trucks as well as condition.

The important thing to note is that once a truck hits the 20-year mark, prices are barely going to depreciate on the market resulting in little to no change in the trucks’ value. The price variation between ages past the 20 year mark is well below $500 for medium and light duty trucks with prices varying around $1,000 for the non-sleeper and sleeper heavy duty trucks. The basis of valuing trucks past the age of 20 is going to be highly based on condition and usage. The market trends are not going to have as high of an impact on the pricing at this age as they would for a vehicle that is still within their first 20 years of use. The majority of these trucks will not depreciate much lower than prices seen during the 20 year mark because sellers still need to make a profit on the sale.

Secondary Markets for Crawler Dozers led by Caterpillar, Deere, Komatsu, and Case