Expanding Supply Influences Truck Prices
Trucking, like any industry, deals with scarcity. There are only so many trucks on the road, and therefore only so much freight that can be transported. With larger fleets comes more opportunities for truckers to aid the economy. But this type of equipment expansion also has other effects – the prices of the vehicles themselves will slowly decrease.
Class 8 tractors will likely continue to drop in price over the next several years. These vehicles have been manufactured at steady rates, and this continued expansion will influence their market value. At a recent research conference, it was noted that used truck prices are greatly influenced by new truck registrations from the prior year.
Given that these registrations have been expanding noticeably over the past several years, prices have been affected. An increase in supply of trucks sold within the last 5 years has caused prices to weaken. Sales numbers indicate that the number of vehicles increase by over 50% since 2010.
In the past two years alone, over 450,000 Class 8 trucks have been sold. This trend will likely cause the prices to remain low. Another issue that is causing these trucks to lose value is the cost of regulatory compliance that comes with them. Meeting emissions standards requires modifications, and the cost of making said changes to these vehicles is off-putting to buyers.
Price drops have been observed at staying around 16% for trucks registered over the past 5 years. In addition to their expanding supply and cost of upkeep, other factors have influenced the price drop for Class 8 trucks. The overall lackluster conditions of the trucking economy in recent years has also played a part in the price drop.