Equipment World Digital Magazine
Issue link: http://read.dmtmag.com/i/860257
August 2017 | EquipmentWorld.com 34 Pre-emission premiums "While we did see some softening of truck prices in second through fourth quarter of 2016, we have seen a slight uptick in prices in early 2017 across all makes and models," says Doug Olive, senior vice president, pricing, at Ritchie Bros. "In particular, we continue to see strong demand for most pre-emission trucks – 2007 model year and older – specifically 'long-n' talls' with C15 power." Heavy trucks were three to four years ahead of off-road equipment in deploying SCR (selective catalytic reduction) technology to reduce engine emissions. By 2011, most truck engines were using these more expensive systems, and as a result, lower mileage trucks built in model years 2006 through 2009 are enjoying a price premium on the used market. "That never used to happen," says Brian Sandon, eastern U.S. sales manager, J.J. Kane Auctioneers. Buyers have concerns about the reliability and longevity of the new emissions systems. And contractors may be worried about their inability to fix or work on these complicated new engines. "You have to have a lot of investment – tools and scanners – and a lot of smaller contractors don't have that ability," Sandon says. Olive points out another change in the truck market: Sixty-two percent of heavy trucks were built with automated transmissions in 2016, up 10 percent from 2015. The secondary market used to price these lower than a manual transmission. But that price gap is closing, he says. "In some cases, we have seen automatics collect more than similar trucks selling with manual transmissions." Unlike the used construction equipment market, where equipment is in relatively tight supply, there is a large supply of trucks on the market – making it a great time to upgrade or add to your fleet, says Olive. And while it may be a good buyer's market, the total population of pre-2010-2011 trucks won't last forever, says Greg Peet, of Heavy Equipment Services, a construction company that also does repair and repurposing of used trucks for construction applications. "We are periodically asked by customers to locate used trucks that we source from various vendors including auctions, which we in turn may repair, rebuild or modify and then sell to the end users," says Peet. "We typically look for 2007 or earlier pre-emissions trucks. The inventory of good trucks that fits this criteria is dwindling due to age and condition of the inventory." "We see problems with EGR valves and coolers predominantly," Peet adds. "We tend to see DPF failures following a turbo or EGR cooler failure after the DPF ingests a lot of oil or coolant." Peet's shop has seen enough of these types of failures to warrant investing in a DPF cleaner system. "This is a chemical based, on-vehicle process that is meant to be used as a maintenance operation rather than a post-plugged repair," he says. Rather than trade up to an emissions-regulated truck, Peet is seeing a lot of customers overhaul older trucks, even as old as 1996 models, and doing an engine rebuild. used equipment report | continued If you haven't priced trucks in a while, you may be surprised what a decent used vocational truck costs. " " – Craig Kendall, The Pete Store YTD change in Commercial Truck Guide Value* Segment 2011 model year 2012 model year 2013 model year 2014 model year 2015 model year Segment Highway Aerodynamic -9.4% -9.7% -13.5% -13.5% -10.6% -11.3% Highway Traditional -5.3% -4.0% -1.0% -0.8% -1.5% -2.7% Medium Duty Cabover -10.1% -7.7% -9.2% -6.3% -6.0% -7.1% Medium Duty Conventional -6.5% -5.1% -5.1% -5.9% -6.3% -4.9% Vocational/ Construction -1.3% -1.3% -1.4% -3.0% 0.7% 0.4% *Source: J. D. Power Valuation Services (formerly NADA Used Car Guide), Jan.-Jun. 2017 Compared with other truck segments, the vocational/construction segment (such as dumps and mixers) saw a slight increase in value this year over last year, while all other segments saw decreases of 3 to 11 percent.