New research on used truck sales show that supply is starting to drop, which means prices should start to rise, especially as gas prices continue to drop.
CNW Research, which does a strong job tracking used car buying trends, has noted in its June 2012 analysis of used car buying that the used truck supply is dropping and the used car supply is increasing.
These numbers are both measured in days' supply, which is a theoretical figure based on how many days that trucks and cars could be sold before the supply runs out. It's theoretical because of the fluidity of the used car market (i.e. vehicles are sold and brought to market daily).
Since January 2012, the used truck days' supply has been fluid when the number was 42.37. In February it was 46.01 days. Then in March it continued to grow to 48.36 and up to 48.52 in April. It dropped in May to 47.29 and then further to 44.01 for June.
On the used car side, as gas prices have fluctuated, and started to drop apparently through at least October 2012 if not longer, the numbers have looked this way. In January the used car supply was 45.92 days (which was above the truck number). Then in February it dropped to 43.28, which put it almost three days ahead of trucks. That margin swelled in March to seven days when cars hit 41.02 and stayed about the same in April at 41.17. Things began to tighten in May when the number hit 42.34 and then the numbers once again favored trucks for the first time since January when the used cars days' supply climbed to 45.62.
What does this mean for the used truck buyer? You might want to get to the dealer sooner rather than later because supplies are bound to get tighter. Don't let hesitation lead to higher prices.
As Art Spinella, the head of CNW Research observed in his monthly report, "Used Days' Supply figures show a slight increase as dealers struggle to find the balance between what they're paying at wholesale and what the public is willing to spend on a vehicle. Inventory control has become a major issue because softer gasoline prices have made economy cars more of a drag on sales. [T]rucks are now in shorter supply than cars, a reversal of recent trends. The outlook for inventory control between cars and trucks will remain murky as long as a solid energy policy remains in limbo and the Mid-East continues to be trouble on the horizon."
It's his last sentence, though, that points out the big problem. Inventory is murky at this point because of outside forces but I'm going to go out on a limb and predict that the truck supply is going to continue to decrease as long as fuel prices decrease.
Why do fuel prices affect used truck supply? Well, Americans have short-term memory problems (myself included). Start paying $30 a week to fill the tank after spending $40 and you just feel better. You're ready to spend some shekels.
On a more macro level, the economy is improving by a lot of measures. Businesses (think small like plumbers and contractors) are needing to upgrade their equipment. Lower fuel prices give them the wiggle room to afford newer used trucks.
There are certain trucks that are going to be more popular than others - so you will really see price pressure there. I wrote recently about the best used cars for 2012. On that list are some trucks (or what are considered trucks) including: 2005-2010 Ford Explorer, 2005-2010 Chevrolet Tahoe, 2005-2010 Toyota Tacoma and 2005-2010 Ford F-150.
Overall, just based on statistics, your best bet in the used pickup truck market might be Toyota or Nissan. According to the CNW Research report, Asian used cars have the most supply as of June 2012 at 46.29 days vs. 44.51 for American manufacturers. (European supply is at 45.71 days but Europeans, while making large and mid-size crossovers, don't make pickup trucks.)
Dale Wickell, who writes about trucks for About.com, has advice on buying a used pickup truck that is going to come in handy for you. His best piece of advice? Once you buy a used pickup, stop looking!
Actually, his best piece of advice is one I can't stress enough. Get a pre-purchase vehicle inspection done. Regardless of how used truck prices do, you're always going to want a pre-purchase inspection before buying a used vehicle. Used trucks get rode hard and put away wet, as the saying goes. They especially need inspections done by certified experts.