Recently, two of the nation’s largest sources of new and used trucks, Rush Enterprises and Penske, have opened brick-and-mortar locations dedicated solely to used trucks. Rush currently operates one Rig Tough used truck location, and is planning to open more this year. Penske Used Trucks currently has two locations, and plans to open two more by the end of 2014. 

This strategy makes sense given the dynamics of the used truck market. Late-model trucks are selling for historically high prices, and increased numbers of these trucks have been entering the secondary market due to the return to normal build rates and shorter trade cycles. In addition, competition between OEM’s for new truck business will likely provide additional late-model trade-ins. 

Looking specifically at Penske, this move represents a shift from their traditional wholesale model towards the retail channel, providing the end user with medium and heavy trucks ready for immediate purchase. In terms of Rush, the move is an expansion of their retail model to provide increased access to trucks returning from trade in the near future. In both cases, an expected increase in volume of trade-ins is the underlying rationale.

Dedicated used truck locations provide enhanced visibility among end users, extend services to areas otherwise not served by a dealer group, and ensure that a used truck is marketed on its own merits as opposed to merely being a component of a new truck deal.

In terms of the customer base, customer analytics have become extremely advanced thanks to better understanding of big data, and major operators like Penske and Rush are surely among the most-savvy when it comes to taking advantage of all the predictive tools available. 

According to ATD 20 Group data, used trucks represent a higher margin per truck than new trucks as a percentage of gross. Establishing physical outlets for used trucks indicates a realization that there will be more iron to move, and there is money to be made doing it.