Medium-duty trucks at auction have had a shaky start to 2017, with both volume and pricing down compared to the same time last year, according to NADA Used Car Guide’s March 2017 Commercial Truck Guide Industry Update. However, with a boost in demand expected in the latter half of the year, medium-duty trucks should finish off this year in better shape than in 2016.

The best-performing segment among medium-duty trucks was the Class 4 truck segment. Compared to the other medium-duty truck segments, Class 4 truck performance in the beginning of the year has looked healthy, according to the firm.

Notably, it was the only medium-duty truck segment to experience a year-over-year increase in price during January. That month, the average wholesale selling price of 4- to 7-year-old medium-duty trucks was $20,243, a 1.8% improvement compared to the same time last year.

Alternatively, four- to seven-year-old Class 6 trucks experienced a 15.2% reduction in average wholesale selling price in January, selling for an average of $21,929. Even with a year-over-year decline in price in, however, January also marked the first time in five months that Class 6 trucks beat out Class 4 trucks in average pricing, the firm noted.  

“We continue to view the Class 6 market as lukewarm as buyers continue to show interest in lighter GVW trucks. However, the potential for improvements in all GVW ranges is greater this year than last,” according to the report.

The worst performing trucks, according to the firm, were Class 3-4 cabovers. These trucks sold for an average of $13,322 in January, 26.5% less than in the same time last year.

“An extremely low volume of [Class 3-4 cabovers] sold in January prompt us to take this month’s average figures with a grain of salt. February’s data should prove more instructive. Market conditions in this segment should be similar to slightly better than 2016, which we characterized as relatively healthy,” the firm stated in its report.

Looking toward the future of used truck values, the short-term looks good while the longer-term looks cloudier. The firm categorized the influx of three- to five-year-old trucks entering the used-vehicle market in the next few years as an unavoidable factor expected to limit pricing improvement until at least 2019.

In 2017, however, the volume of trucks entering the used market is expected to match last year. In addition, demand for trucks is expected to increase this year, due in part to the new administration in the white house. These factors combined should make 2017 a better year than 2016 for the used-truck market, according to the firm.   

“Overall sentiment about the trucking economy is improving, due mainly to expectations of tax reductions, regulatory rollback, and increased infrastructure spending. Even though the Trump Administration has not yet released any concrete plans, end users are somewhat more optimistic about their business outlook. As for headwinds, a renegotiation of international trade deals and a potential “border tax” are longer-term issues that will increase the cost of doing business if enacted,” the firm stated in its report.

Originally posted on Work Truck Online