New Truck Purchasing Trend

R.L. Polk & Co. released a registration data which states numerous fleets are now shifting to late-model used trucks just to meet their requirement for additional vehicles.

This year, initial registrations of Class 8 trucks throughout the country is around 229,904. Approximately 77% of the total number have been used trucks and the other 23% have been new ones.

Highlighting the shift, in 2008, 42% of all initial Class 8 registrations were for new trucks now it's down at 23%.

Last week, Polk also reported that registrations of new Class 8 trucks went up by 7.8% in the second quarter, compared with the same three months of 2009.

Since the economy began to decline rapidly in 2007, this marks the first time that new truck registrations have surpassed year-ago totals for three consecutive months.

Meanwhile, ACT Research Co., announced that July Class 8 new truck orders grew 27% above a year ago. Sales were rising “as trucking company profitability continues to rebound strongly,” the company said.

According to numerous industry experts the reason why fleets are apparently switching more attention to used trucks, is due to older trucks have lower costs and uncertainty of the efficacy of new trucks having engines manufactured to meet 2010 federal emissions standards.

Restricting federal pollution prerequisite have contributed greatly to bolster truck prices. Comparing a 2010-model tractors to 2006 models, generally, 2010-models are about 50% more expensive than the 2006 old models.

A number of dealers disclosed that good, late-model secondhand equipment is in short supply. A few reported that there is a growing interest in new trucks, with some fleet officials declaring they are unsure of the increased downtime of older equipment.

It seems that large fleets are the ones considering a low-mileage, late-model secondhand equipment, on the other hand, smaller fleets are satisfied to acquire older trucks with many more miles on their odometers.

An interesting incidental information of the data from Polk is that regardless all of the buying and selling, the total U.S. Class 8 fleet as a matter of fact decreased by about 20,000 vehicles in the second quarter.

Polk divulged that the decrease happened since new purchases failed to keep up with vehicle retirements, it means that total freight volume dipped during that period.

This data is in line with sprouting reports that freight hauling volume is in tight supply in some traffic lanes and that many shippers are hoping to lock in carriers now to manage what the companies pray will be increasing freight capacities as the economic expansion increases.