Expect more advanced levels of technology and fuel efficiency on used heavy-duty trucks in 2021, while prices stabilize after plunging in 2020, according to Daimler Trucks North America.
Used-truck prices were coming down from a peak in early 2019 even before the COVID-19 pandemic, said Mary Aufdemberg, president and general manager, Daimler Trucks Remarketing, in a virtual briefing with trucking reporters Dec. 9. “The good news is, we were really ready for a challenging 2020 before the rest of the world was ready for a challenging 2020,” she said.
The COVID-19 pandemic affected pricing even more, with an average of 8.5% depreciation per month in the first quarter. “We saw a pretty similar decrease in 2016, but that was spread over a longer period of time.”
The fourth quarter of the year, though, has seen soaring new-truck orders. “The fire was lit on the used-truck side before it was on the new truck side,” Aufdemberg said. “It’s been a wild ride from a low to a high in this marketplace. Prices are on the rise for used trucks right now, inventories are decreasing, but we do expect supply to keep coming.”
That’s because those new-truck orders will also mean trade-ins will hit the market as those deliveries start happening as soon as January.
“Model year 2018s will be 4-year-old trucks next year, so they’re starting to come into the marketplace in 2021,” she said, noting that most large over-the-road fleets have 3- to 5-year trade cycles.
High-Tech Used Trucks
Aufdemberg said because the Freightliner Cascadia “is the number one-selling, market-leading truck and has been since it was first built,” that there is a good supply of these trucks on the used-truck market. And we’re starting to see some of the second generation “New Cascadia” trucks available for purchase as pre-owned trucks, offering advances in fuel efficiency, automated transmissions, and technology.
There’s an increasing demand for safety systems on the used-truck market, she said, as well as for automated transmissions.
While there are still plenty of Classic Cascadias on the market, she said, she’s excited about being able to offer the new version. “There are so many benefits to the new Cascadia,” including a more automotive feel in the cab, a smoother ride, fuel efficiency, easier maintenance – and an upgrade from the Detroit Assurance 2.0 advanced safety system to Detroit Assurance 4.0.
One thing that will mean is that used-truck buyers will want to be sure they are familiar with what technology is on the trucks they’re buying. For a fleet that hasn’t operated these advanced driver assistance systems before, some driver training is a must so they understand what to expect on the road.
“Next year I think prices will continue to stabilize, they still below 2018 and 2019 levels.” She predicts we will see used-truck inventories tightening, “so it can be harder to find that perfect truck, but I do see supply still coming. You will see a good number of model year 18s hitting the marketplace.”
Another trend the company is keeping an eye on is whether current trends in medium-duty truck demand for last-mile delivery and short-haul operations will change the used-truck market. Traditionally, she said, medium-duty and vocational-truck owners are more likely to keep those trucks until the end of their useful life, or close to it. But last-mile delivery and the growth of electric vehicles could drive changes, which DTNA wants to be prepared for if that happens.
“We want to make sure we’re able to pivot, as we possibly see more regional transportation and door-to-door delivery happening. I think we’re going to see a change.”
Another thing to watch for is the eventual application of Daimler Truck Financial’s new Dynamic Leasing program, which bases payments on actual miles driven, to used trucks.
“We absolutely want to be a part of that,” Aufdemberg said in response to a question. “But Detroit Connect needs to be a part of it. It will be available on some trucks and not others, because we will need that technology” to make the Dynamic Leasing program possible. But when there is more volume of trucks with that technology on the used-truck market, she said, “we think it’s a great product for used trucks.”
Despite the pandemic, DTNA's network of SelecTrucks used-truck centers has grown its footprint in 2020 from 26 location to 30, adding locations in Memphis and Chattanooga, Tennessee, as well as Phoenix, and its second location in Canada, this one in Winnipeg. She also said to expect continued growth in the SelecTrucks Center network.
Originally posted on Trucking Info