Prices plummet on trucks

A spending spree egged on by higher demand for trucking the past several years has had a head-on crash with the trade war. Until this spring, sales of both new and used Class 7 and 8 semitrucks were booming.

The trade war, however, has slowed demand for trucking, and a glut of 5- and 6-year-old trucks hit dealer and auction lots this past fall. "Dealers are reporting continued declines in used truck prices and growing truck inventories," observes Steve Tam of ACT Research, a firm that focuses on commercial vehicle and freight industries. "Some truck dealers and truckers have been unpleasantly surprised that the rate of decline in truck prices has not slowed. The silver lining in the softer used truck market is that there are some bargains for savvy truckers and smart truck dealers now, compared with the overheated market we saw last year."

At press time, used truck sales had fallen 18% since early 2019. Sales of truck prices below $50,000 have plummeted 30% in 2019. In particular, 2013 to 2015 model trucks lead the bargain basket, as transport fleet trucks are typically operated for five to six years before being sold or traded in for the first time. Top this off by the fact that a glut of trucks under four- and five-year leases are coming on to the market, and you get a setup where used semi truck inventories continue to swell.

Industry experts also predict that used semitruck sale prices will continue to erode for all of 2020.

Mining the Good Deals on Fleet Trucks

As mentioned previously, this sets up an opportunity for agriculture to pick up bargains being served up by truck dealers and auction houses unloading a buildup in vehicle inventories.

Generally, prices on all used semitrucks will be soft this year. The only exception to this will be pre-Tier 4 trucks (most of which were built in 2007 and earlier), which is discussed here in the Pocket Price Guide.

Capitalizing on depressed trucks will require you to venture into the unfamiliar territory of buying a fleet vehicle as opposed to one previously owned by a farmer (which are always preferred by ag customers). The supply of farmer-owned trucks is tight, as many farmers are holding on to existing vehicles until commodity prices improve.

Farmers unfamiliar with dealing with truck dealers or who are bidding at truck auctions need to practice caution compared with buying from a machinery dealer or at auction.

Inspect the truck or hire someone to inspect the truck for you (if, for example, you are buying online). "Call the dealer or auctioneer conducting the sale and get the truck owner's phone number. Then call that person up," recommends Bill Nelson of US Auctioneers, a nationwide truck auction house. "Ask the owner how the truck was used (over the road vs. short runs), what specific maintenance it received, and if the truck had any problems. Be sure to get copies of the truck's service records for verification."

Hit the internet and read reviews of that truck's performance. As with farm equipment, certain truck models have their performance advantages and engineering downfalls.

Finally, be sure to stack up how a particular truck is equipped (engine size, transmission, wheelbase, gross vehicle weight rating, etc.) and its accessories (hydraulic systems, engine brake, etc.), as these add-ons have a huge bearing on its asking price or bid value.