I’m always looking for the story behind the story when it comes to used truck price trends. Recently, I’ve been looking at new truck demand for clues as to the behavior of used truck pricing. The two graphs below show retail and wholesale average prices compared to new truck sales. Average prices reference all Class 8 sleeper tractors with under 1,000,000 miles as reported to NADA.

Keep in mind that there are some caveats to this examination right off the bat. First, used truck pricing has been driven as much by a supply shortage as by increased demand, so pricing is not a perfect proxy for demand. Second, OEM’s and fleets work together to manage the delivery cycle, so the time component is externally manipulated.  Third, there are of course internal business factors influencing the purchasing decision. Finally, artificial manipulators such as a pre-buy introduce further variables into the mix.

With all that in mind, what can we take away from the data we do have?

Looking at the graphs, used pricing had been steadily declining throughout the recession year of 2008, in contrast with new sales, which dropped off a cliff in January of 2009. In late 2009, both sales and prices jumped up as the economy (briefly) rebounded and freight demand increased. After this initial jump, sales and prices generally trended upwards throughout 2010. New sales started to stagnate in 2011, with a bump in June and August numbers providing some optimism. Used pricing also stagnated a bit until June, when both retail and wholesale averages again started to rise. Currently, all measures remain at or near 3-year highs.

So, what does all this tell us? The decline in used truck pricing that began in early 2008 may have predicted the dropoff in new sales that occurred later in the year. However, used trucks didn’t provide any advance notice of the uptick of late 2009 – both measures increased in tandem in response to the recovery. So while it would not be statistically valid to assign either measure any predictive authority, don’t expect them to move in opposite directions.

Stay tuned for a similar comparison with new truck orders.