The Price Gap between Resale and Auction Differs by Truck Size Class

Heavy duty trucks show much greater volatility in the auction market while medium duty shows fewer fluctuations between quarters consistently falling below private resale prices.

Quarterly price gaps between the private resale and auction markets are relatively steady for all medium duty models, while heavy duty trucks show quarterly differences.

Key Takeaways for Decision Makers
SELLER: If you plan to sell a heavy duty tractor, the first quarter is the best time to sell at auction for optimum pricing.

Are there differences in pricing of trucks between the private resellers and the auctioneers; if so, how different? These are important questions to be aware of when looking to either sell or buy a truck on the used market. If you are looking to sell, ideally you would like to find the outlet that gets the highest price and if you are looking to buy then you would want a lower price. Of course, there are always positives and negatives to buying/selling in either market such as how long will it sit on the market before selling and are you willing to wait or does the truck need to be sold immediately no matter the difference in profit between the markets.

Using 60,000 market data records that help power the Price Digests Truck Blue Book an analysis was done to determine the difference between resale and auction markets for trucking. First, you must know how both markets are doing and then determine how much profit you will lose or gain by selling at auction versus privately. An important note, all truck prices within this analysis from the past two quarters were non-sleeper trucks only. It is quite evident that the medium duty market is much less volatile than the heavy duty. In both Q4 2014 and Q1 2015, the medium duty trucks priced lower on the auction market than private resale consistently across all 8 model years. An interesting trend that can be seen is that in Q4 2014 the percentage difference between the two markets rises from 2012 to 2010 before dropping in 2009 and showing a gradual increase back to 2005. During Q1 2015 though, there is a slight increase in difference (-41.7%) on the 2011 models before reducing to a -28% difference on 2009’s, gradually rising back up to -44.6% on 2007’s and dropping off at 2005. In other words, the model years that had the largest price gap during Q4 had the smallest in Q1 and vice versa.

The heavy duty trucks were quite different in terms of price variation between resale and auction markets in comparison to medium duty. During Q4 2014, the 2009, 2011, and 2012 models all showed higher prices on the public market ranging from -6% to -21%. The most extreme (-21%) price difference where auction was lower was on the most recent model (2012) whereas the largest price difference where auction was greater happened to be on the 2007 models at 54% higher than private resale. The trend appears to be that the newer heavy duty models are pricing lower at auction, but as they get older the auction prices are actually greater with a peak year of 2007 due to the demand of these particular trucks. Q1 2015 was certainly different though. The newer models such as 2012 and 2011 saw the highest auction prices in comparison to private of all model years. The 2010 models then drop to an 8% difference between market pricing and rising again for 2009 back through 2007. The only time auction was less than private resale during Q1 2015 was on the 2006 models and the difference was only at -5%.

One thing that is important to keep in mind when comparing the Q4 to Q1 prices is that Q1 is quite a busy month for auctions. More than likely, this had a large impact on the heavy duty pricing coming out much higher at auction during this quarter in comparison to the previous. The past has shown that the heavy duty market shows much more drastic fluctuations than the medium duty, which is why the medium duty trends were not following suit. Also, the more popular model years for auction tend to be between 2009 and 2005 which is what left room for the 2012 and 2011 models to price much higher than usual.