These are tough times, but they can be good times if you need equipment. The economy is down, and the tumble of new truck sales has depressed prices of both new and used trucks.
That's bad for lots of people in the industry, but a boost to anyone who's in a buying mode.
"There is no better time to update fleets, if you've got the money, than right now," says Steve "Bear" Nadolson, manager of Arrow Truck Sales' branch in Columbus, Ohio, and president of the Used Truck Assn.
Inventories of used medium and heavy trucks total 150,000 to 200,000, according to industry estimates. If it's 170,000, it would be about 75 percent above normal levels, Nadolson says. Such high supply with limited demand has hammered down prices.
A look at ads for used trucks shows late-model, low-mileage tractors selling for well under $40,000, far less than half their cost when new. 1997, '98 and some '99 sleeper-cab tractors with 400,000 to 500,000 miles typically sell for $25,000 to $35,000, says Nadolson. Of course, make and model matter, as does condition. And such tractors continue to come in.
However, Nadolson says he's starting to see a scarcity of very late-model tractors - 1999 and 2000 models with under 200,000 miles. Models like Kenworth's W900L have risen in value, because they are desirable to buyers and comparatively scarce. Peterbilt's 379EX, the stereotypical "large car" that all truckers supposedly lust after, has fallen some in value because Peterbilt sold many to fleets in recent years, and now many are being traded in.
Overall, "the toilet won't flush for two years," Nadolson says, meaning the oversupply of all used trucks won't be exhausted until then.
Meanwhile, "if you've got trucks to trade, you're not going to get what you got before, but if your book value [on a truck] is zero, then what does it matter what you get?" Nadolson argues. You might be able to get another $1,000 or $2,000 out of it if you sell it retail yourself, he says, but most fleets don't want the aggravation.
The deflated prices have actually resulted in a "real-value market," he contends, because previous prices were inflated by factory deals from some builders.
This is an excerpt from "Builders Hunker Down," a look at the truck sales market, in the November issue of Heavy Duty Trucking magazine. To see if you qualify for a free subscription, click here.
That's bad for lots of people in the industry, but a boost to anyone who's in a buying mode.
"There is no better time to update fleets, if you've got the money, than right now," says Steve "Bear" Nadolson, manager of Arrow Truck Sales' branch in Columbus, Ohio, and president of the Used Truck Assn.
Inventories of used medium and heavy trucks total 150,000 to 200,000, according to industry estimates. If it's 170,000, it would be about 75 percent above normal levels, Nadolson says. Such high supply with limited demand has hammered down prices.
A look at ads for used trucks shows late-model, low-mileage tractors selling for well under $40,000, far less than half their cost when new. 1997, '98 and some '99 sleeper-cab tractors with 400,000 to 500,000 miles typically sell for $25,000 to $35,000, says Nadolson. Of course, make and model matter, as does condition. And such tractors continue to come in.
However, Nadolson says he's starting to see a scarcity of very late-model tractors - 1999 and 2000 models with under 200,000 miles. Models like Kenworth's W900L have risen in value, because they are desirable to buyers and comparatively scarce. Peterbilt's 379EX, the stereotypical "large car" that all truckers supposedly lust after, has fallen some in value because Peterbilt sold many to fleets in recent years, and now many are being traded in.
Overall, "the toilet won't flush for two years," Nadolson says, meaning the oversupply of all used trucks won't be exhausted until then.
Meanwhile, "if you've got trucks to trade, you're not going to get what you got before, but if your book value [on a truck] is zero, then what does it matter what you get?" Nadolson argues. You might be able to get another $1,000 or $2,000 out of it if you sell it retail yourself, he says, but most fleets don't want the aggravation.
The deflated prices have actually resulted in a "real-value market," he contends, because previous prices were inflated by factory deals from some builders.
This is an excerpt from "Builders Hunker Down," a look at the truck sales market, in the November issue of Heavy Duty Trucking magazine. To see if you qualify for a free subscription, click here.
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