To follow up on my previous blog that compared used truck pricing to new truck sales, here is a comparison of that same pricing data vs. new truck orders. Average prices reference all Class 8 sleeper tractors with under 1,000,000 miles as reported to NADA.

The results of this study are a bit more notable than the last one. Looking at the Retail graph, new truck orders appear to predict the late-‘09/early-‘10 rise and fall in used truck prices almost perfectly. Approximately two months after new truck orders rebounded, used truck prices followed suit. And the decline in orders two months later was mirrored closely by a decline in pricing. Then, both orders and prices increased in tandem throughout 2010.

Now, here’s where things get interesting. Orders dropped off substantially in Spring 2011 (May, to be precise). As of July, used truck prices had not yet followed suit, and preliminary August data suggests prices rose even more. Should we assume there is now a disconnect between orders and prices, or are prices just taking longer to react?

My position is the factors driving new truck orders are less related to the factors driving used truck pricing than they had been a year ago. Throughout 2010, fleets needed new trucks to replace older iron in the face of increased demand for freight capacity. Used truck pricing increased for the same reason – late-model trucks are a good substitute for new, and the improved freight environment prompted non-fleet buyers to replace aged equipment. Today, fleets have completed the bulk of their replacement cycle. As for used trucks, price increases are driven as much by the supply shortage as by increasing demand.

In light of all this, I’m going to say we are now in a period of disconnect between new truck orders and used truck pricing. In other words, used truck pricing should remain strong even though new truck orders have declined. This is where the low supply of 2008-2011 model year trucks really starts to pay off.