From the category archives: Industry News and Events

Industry News and Events

Tax Agreement Implications for Trucking

By now you’re well aware of the basic components of the tax agreement recently codified into law. Of major importance to trucking are two facets that have gone largely unmentioned in the media. First, the Section 179 deduction has been retroactively restored to $500,000 for 2012, and extended for 2013 (2012’s limit was previously $125,000). This means business can deduct up to a half million dollars’ worth of new and used equipment from their 2012 and 2013 tax liabilities (although the benefit decreases if more than $2M is spent). Second, the 50% bonus depreciation has been renewed for 2013. This essentially means businesses can deduct half the cost of their new equipment in the first year (as opposed to spreading it out over time). This benefit is particularly attractive to businesses who spent or will spend more than $2M on equipment – not much of a stretch for a fleet replacing older trucks. Both these components of the tax law encourage investment. With the tax portion of the fiscal cliff addres ...

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Demand for New vs. Used Sleeper Tractors

The graph below traces new truck sales and average retail used pricing for all sleeper tractors under 1,000,000 miles. We consider used truck pricing a reliable proxy for demand, since other measures such as total sales reported or sales per dealership are subject to external variables which reduce their precision. As you can see, the correlation between new sales and used pricing is generally strong, with sales and pricing largely mirroring each other directionally. For the entire graph, the actual correlation is a relatively strong 0.791. For the post-recovery period (starting in January, 2010), that number jumps up to 0.896. New sales and used pricing both took a dip in late 2011. On the new side, this shift was likely due in part to the December expiration of tax incentives that encouraged purchases of new trucks. On the used side, there was probably increased pushback from buyers reluctant to pay high prices for trucks with historically high mileage. A price ceiling of sorts appears to have fo ...

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What Effect Does Engine Type Have on Selling Price?

To follow up on my last post, below are four graphs that trace retail selling prices for 2008 model year aerodynamic sleeper tractors. Results reflect all retail sales we collected in calendar year 2011. The data set includes the same trucks as last time, except now we have added engine as a variable. A few points jump out. First, Volvo’s proprietary D13 and D16 engines held up well against the ISX in most applications. Starting at the top, the 780/D16 brought $1374 more than the 780/ISX. Similarly, the 670/D13 brought $1424 more than the 670/ISX. The 630/D13 was a bit closer to the 630/ISX, carrying a $477 premium. The exception to this rule was the 730, which brought $2438 more when equipped with an ISX. One important variable with Volvos is the transmission. Volvo’s iShift automated manual generally commands a premium. That transmission is mated only to Volvo engines. Since we have not adjusted for transmission in this data set, that factor may be skewing results. A future study ...

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ATD in Las Vegas!

If you're heading to the ATD/NADA Convention in Las Vegas this weekend, look for me at the ATD Booth! I'll be available to discuss all the data posted in this blog, as well as our commercial vehicle valuation products.

Be sure to check out our VIN scanning functionality for NADA Online - all you have to do is point your smartphone camera at a VIN barcode, and our service will automatically pull up year, make, and model. It's part pf our suite of commercial vehicle valuation products, which help you ensure profitable trade-ins, new sales, and loyal customers! Come by and see a free demo!

And of course, be sure to follow us on Twitter and Facebook - we'll be posting from the convention floor. Be sure to attend the ATD Super Workshop with Eric Starks of FTR Associates, the Industry Message from Martin Daum of Daimler Trucks, and the Keynote Speaker, Captain Gerald Coffee.


 

Used Truck Association Newsletter Features Guidelines

The ATD/NADA Official Commercial Truck Guidelines Update is featured in the latest edition of Used Truck Association's Industry Watch newsletter. Chris Visser touches on increasing volatility in the used truck market.

 

'Successful Dealer' Highlights the Used Truck Market

The June 23rd edition of Successful Dealer talks about the used truck market. The article states that we are in a “seller’s market,” which I doubt anyone involved in the used truck industry would disagree with. The article also raised an important point about financing – some lenders are still having a hard time recognizing that used truck prices have risen as much as they have in the past year and a half. As we stated in the May edition of Guidelines, four-year-old trucks brought almost 40% more money in 1Q 2011 than they did in 1Q 2010.

Also, as I mentioned in a previous blog, some lenders may be using only our base values and excluding options/accessories and mileage. While any business is entitled to use our values as they see fit, a complete NADA valuation includes all adjustments.

As always, I’m here to clarify any of these issues. Just send an e-mail to cvisser@nada.org.

Clearing up Misconceptions of the Valuation Process

Steve “Bear” Nadolson recently reacted to used truck valuations in the March/April edition of Premium Insights. While Bear was speaking in general terms, I would like to clarify two concepts as they pertain specifically to the ATD/NADA Official Commercial Truck Guide®. The first is the lag time between finalization of values and publication in the guide. The second is how companies use our published values.

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