The used truck market rebounds: returning to pre-covid levels in 2023

The used truck market is almost back to pre-Covid levels. That’s the overwhelming message CM has gotten from a wide range of commercial vehicle dealers and manufacturers. The used market in 2022 saw unprecedented levels of demand placed on the used truck market as manufacturers struggled to maintain supplies of new trucks due to component shortages and the knock-on effect of the pandemic. Last year, however, many of those pressures were relaxed, and the market for second-hand trucks found itself returning to business as usual.

Tractor unit prices, we are told, have returned to the levels of 2019, and while good examples of young, low-mileage trucks are still commanding a premium, it is far from the highs of 2022. Of the many dealers CM has spoken to, most say that prices are on a par with or slightly above pre-pandemic levels for your average 6x2 tractor unit, while prices for rigids have held up somewhat, but still declined.

“A general view would be that prices have dropped significantly across the board,” explains Paul Young, Paccar Financial Europe export regional asset manager UK & Ireland. “The used truck market has been artificially buoyant due to long lead times for new, so the fact that the ‘new’ market is returning to normal may explain the weakening of used values.”

The knock-on effect has been that vehicles retained for longer have now been returned to the market, with many older high-mileage units being returned after extended use as the constraints of the new market have been resolved.

Overall, the used market in 2023 began to normalise after the first quarter of the year. New registrations rose from March onwards, with fleets replacing and remarketing their assets in large volumes. That’s not to say the used truck market was awash with supply from then onwards, but we are told where there once was little to no availability of sub-500,000km tractor units, suddenly lower-mileage examples began to materialise in significant numbers.

Brett Reid, head of used trucks at Mercedes-Benz Trucks UK, explains: “In the latter half of 2023, we found that prices on used vehicles definitely slowed, but this was mainly due to average specification lower-horsepower tractor units. We find ourselves with a good mix of stock currently, and we’re fortunate to have a decent holding of varied horsepower tractors with under 500,000km on the clock, which has meant the pricing is still reasonable. This gives operators confidence for future residual value development.”

Neil Willis, Renault Trucks head of used trucks UK & Ireland, agrees and says that one of the challenges has been trying to explain to buyers that the sort of stock now on the market is different to previous years, even if the supply levels are coming back. “The new normal for the average mileage of returning tractor units is now 500,000km-plus,” he says.

High-horsepower tractor units from premium brands continued to command significant amounts of interest – a recurring feature of the Covid era market. The commercialmotor.com classified section capably demonstrated this phenomenon in almost every single month of the year, when high-horsepower Volvos and particularly Scania S-series tractor units not only attracted huge numbers of page views, but also substantial numbers of enquiries, selling quickly and at strong prices.

Reid also notes that while the availability of tractor units increased, it wasn’t the same for all rigid vehicles, which would typically have followed the same pattern. Instead, in 2023, the market for construction-type vehicles proved to be volatile, even outside of the usual peaks and troughs of the year.

Russell Leech, remarketing manager at TIP-Used, describes 2023 as the most challenging year in the last 20 years, pointing particularly towards the tractor market. Agreeing with everyone we spoke to, he adds that the market has settled, with supply increasing and that the prices of “rigids of all weights have also seen a return to their pre-Covid levels”.

While most dealers we spoke with are confident that 2024 will be a more stable year, some doubt has been cast over how the market will react to ongoing high interest rates. Several manufacturers highlight this as a particular cause for concern in the new truck market, which could lead to operators delaying replacements as they look to run on assets that are already paid for or have lower financing costs. The used market could therefore begin to find itself with fewer units. 

Geopolitical unrest and an impending election could also cause further instability and drain confidence from the market. However, the overall mood is certainly optimistic, as unlike in previous years, dealers will at least have more stock to sell in 2024.

- This article was first published in the 18 January issue of Commercial Motor.