Unlike the retail channel, the January wholesale channel was characterized by an older, higher-mileage mix of trucks selling through auction and dealer-to-dealer channels. Sales volume of trucks with under 600,000 miles appears to have peaked in the 3rd and early 4th quarters of 2014, dropping at the end of the year. This group is mainly represented by the 2010-2012 model years. See graph below for detail.

Pricing for trucks with 400-600K depreciated mildly – approximately 5% from the 1st quarter to the 4th - but those with under 400K dropped more notably - about 23% in the same period. The 2011 and 2012 model years have been hit hardest in terms of depreciation. See graph below for detail.

A reduced number of International ProStars cycling through the market is partly responsible for the lower volume this month, although that factor does not explain the multi-month trend. It is possible that the wave of trade-ins peaked in mid to late 2014, with new truck sales since then increasingly representing expansion rather than replacement. Of course, the severe weather much of the country has been suffering since December is another contributing factor.

We consider January’s results more of an anomaly than a demographic shift. High new truck deliveries should result in a high volume of trades, and demand for low-mileage trucks still outweighs supply. As such, we expect pricing and volume for the sub-500K cohort to stabilize going into the spring. Stay tuned.