The used truck industry will be hit hard after the COVID-19 pandemic subsides according to one used truck dealer. The prominent UK dealer, who wishes to remain anonymous, believes that prices of second hand trucks could crash as the country gets back to its feet.
“During the last 18 months there has definitely been an over-supply of used stock which is why the residual values haven’t been what they should be,” they told CM.
“What we’re in at the moment, in this semi-lockdown, it’s going to increase unemployment and the government will have to increase taxes to get rid of the debt burden. VAT will probably rise and that will affect the average man with how much money they have in their pocket.”
They believe that retail and transport will be particularly badly affected, as consumers tighten spending and hauliers adjust to the shrinking demand for the movement of goods.
“There’s going to be huge oversupply in transport equipment when this is over, and prices will drop like a stone. Let’s say we are in semi-lockdown for six weeks. When that ban gets lifted there’s a lot of people who will be unemployed or furloughed on a percentage of a salary and they will be pessimistic about their future. They’re not going to be spending like they were before. It will dampen sales figures for a very long time, and a lot of weaker shops will close. In this period, it will probably change society and people might think twice about going out. When the restrictions get lifted, I think they’ll be a couple of days of blowout where people get blind drunk and eat until it comes out of their ears, but then they’ll be sensible. We could not just enter recession, but a depression.”
While unsure of just how badly used truck prices will be affected, the dealer predicted anything from an 20% drop in used values to as much as 60%, with newer vehicles more badly affected than older models.
“I think this will hit all industries badly, but particularly the transport sector and it will probably get rid of a few dealers as I don’t think they’ll be huge demand for a used truck at the end of this.