With an incoming recession hanging over the economy, everyone is having to prepare for economic downfall. With that has come a decreased demand for freight transport and an increased amount in interest rates. These together have led to used heavy-weight trucks sitting on the market for longer than expected as we are coming up on three years since interest rates spiked.
When factories shut down during the pandemic, supply chains were greatly affected. This led to used items’ values blowing up, making used cars for the first time match the price, and often even surpass the price, of brand-new makes.
Since March of 2022 though, the value of heavy-duty trucks has dropped 20.67% year to date.
The average price of a heavy-duty truck at one point found itself to be $62,719 at the beginning of this year, which was $10,000 lower than it had been around the same time in 2022. Even the average mileage on the truck is lower now, with an average of 442,00 miles at the resale point, which is also 10,000 lower than the average from a year prior.
The interesting thing, according to sales analysts, is that the mileage has actually increased for trucks under 2 years old, but as they go up in age, their mileage drops down. They believe this means there was an increase in driving in 2021 and 2022 but then a steady decline in 2023. This makes sense given the nature of the pandemic, as from mid-2021, people started to try and go out more in safe capacities, but airplanes were still limited, so more people started to take to car travel and take road trips.
With decreased demand still happening for freight, fleet and owner-operators are starting to offload their high-mileage equipment. They no longer have a need for the extra vehicles, so they are putting them up on the market. This in turn has led to the average age of used trucks for sale being higher than it was before, approximately 9.6 years.
As the economy continues to be in a limbo state of the unknown with a possible recession impending, the auto industry and used vehicle industry will likely continue to yo-yo. Some aspects will increase, some will decrease, and some will continue on the track we are on.