A recent Transport Topics article (subscription required) examined the issue of insurance underwriting for natural gas vehicles. Underwriters are finding it somewhat challenging to write coverage for these vehicles due to the lack of market experience.

NADA’s database of sold natural gas vehicles is essentially nonexistent. Even with the recent improvements in availability/choice and interest in natural gas vehicles, the segment remains miniscule. In addition, owners of NG equipment tend to hold on to these trucks longer than usual. As such, there have been almost no NG vehicles reported sold to NADA over the years.
Going forward, as is usually the case with new vehicles, there will be a bit of a chicken/egg scenario – sellers may have difficulty selling/financing the truck because there’s no NADA value for it… but there’s no NADA value for it because none have been reported sold. What usually happens is a few dealers will make a judgment call and establish the first few selling prices for the truck. Then, when those sales hit our database, we can place a value on the truck.
From our current vantage point, we expect used natural gas vehicles to command selling prices at least on par with their diesel counterparts, and most likely higher. Residuals are less clear – the comparably high cost of NG vehicles new means they will need to command a substantial premium over used diesels (or diesels will need to disproportionately decrease in value) to achieve comparable residuals. Of course, new NG pricing should come down over the next few years, mitigating that factor. Overall, taking the long view of a decade out, NG trucks are forecast to still represent only a low single digit percentage of the market. This factor alone should be enough to support strong selling prices.