Due to economic uncertainty, fleets and other owners are keeping their trucks longer. Typically they kept their trucks between 3 to 6 years but now we are seeing it’s much longer. They are only replacing these trucks when the cost benefits of the price of a new truck makes sense, but the inherent problem they face is does it make sense to keep that old truck with the amount of maintenance and repairs it needs.

In 2012, the used truck market sold about 240,000 class 8 sleepers whereas the new truck side sold about 190,000 class 8 sleepers. There was a 15% to 20% decrease on the used side but a 25% to 30% increase on the new side which. Fleets were investing in the new market, not really looking at the used truck models because of the high price and lack of availability of trucks under 600,000miles so they were forced to buy new because they needed to replace their equipment.

There are two things we have to look at here, the supply side and the demand side. The supply side speaks to the value of equipment that fleets and operators own versus the cost of a new truck. The value of an average sleeper tractor has increased by about $10, 000, this would be a good thing, except for the fact that a new sleeper tractor increased by double that amount. This means is you are going to have to come up with more money out of pocket to purchase a new truck. On the demand side, that speaks to the economic factors with uncertainty being the main factor. Just as important is consumer behavior, since that drives the economy. The good news is we’ve seen a pick up in consumer spending, and this is attributed to how consumers are feeling about their job security, confidence on their housing prices etc. Once the other half of the fiscal cliff is addressed, in a quarter or two quarters, we should expect to see more improvement in economic conditions, which makes for an even better market for truck purchasing.