By Bill Bishop, SVP of Sales and Marketing, FLD Remarketing
January 24, 2024
Outlook for the Wholesale Used Work Vehicle Market in 2024: The Potential for a Stable Year
As I’ve stated in the last few years, global and industry factors mean that the jury is still out on the year ahead. That’s simply because the world we live in can change in an instant. After all, who could have predicted that a year that started out so calmly could debilitate into the scenario we saw in the last third of 2023?
Now that fleets can start to sell aging units, those vehicles are worth nowhere near the same amount they were a year ago, and in some cases can’t even be sold at any price. So – where do we go from here?
First Half 2024 Predictions from our Team of Seasoned Experts:
- For the most part, we expect the wholesale used vehicle market to hold steady from now until May or June of 2024.
- At this point, there are lots of vehicles coming off lease and we expect that as long as new vehicle availability continues, we can expect those numbers to increase 30% year-over-year for most classes of white metal.
- Well maintained assets will continue to sell for a premium, while low-demand vehicles will fall even further in value, some to the point of being worthless.
- The market will need time to work through the backlog of assets from 2020-21. Given this, units will continue to be – on average – 14 months older than what we saw prior to 2019.
- We are confident we’ll see an increase in volume over the next 6 months, as OEMs deliver on vehicle orders and fleets cull fewer desirable assets.
- Unfortunately, this will not result in a corresponding increase in wholesale vehicle prices, which will continue to see downward pressure.
- Sleeper units and day cabs will fall even further in 2024, though not as far as in 2023.
- Class 6 and 7 vehicles will “float” back down another 5 to 6% in the first half of next year.
- Classes 3 to 5 will not fall in price as far as their larger counterparts, but we still predict a drop of 5% more than we would see in a typical pre-pandemic year.
- Class 1 and 2 and light duty units will fare slightly better with prices down 3 to 4% in first 6 months.
Mid 2024 and Second Half of the Year
While there are a number of factors – the economy, global politics, the election – that could throw a monkey wrench in to the second half of 2024, our team believes negative factors will slow down and that we should see a somewhat normal cycle, more akin to the first four months of 2023. That includes OEMs delivering a near full allotment of vehicles in the Fall.
In addition, we predict:
- Prices to start dropping next September, as assets become a year older in the runup to tax season.
- Provided we can avoid some kind of unforeseen meltdown, Q4 should be fairly normal with diminished pricing and what we hope will be more stable volume.
- Robust consumer spending will drive the demand for final mile delivery, and hopefully the prices of used vehicles.
- Fuel prices will continue moderately down.
- If interest rates – which remain murky given the strong economy – can hold, we expect the economy to normalize, with less sticker shock and consumers buying more of the kinds of items that drive demand for wholesale used vehicles.
- A soft landing for the economy is possible, but so many factors like housing, hyperactive rental prices and the election give the economy a good reason to go one way or the other (and of course we’ll be watching intently for signs of which way that will be and look forward to sharing).
The EV Inflection Point
While they haven’t affected the used vehicle market in a large way yet, we believe 2024 will be a pivotal year for EVs, as the realities of higher costs, limited infrastructure and a host of barriers sink in. This will likely cause many fleets to rethink EVs and we expect hybrids and other options will become key buzz words.
We also expect outright objections to EVs from some fleet managers, who simply don’t see a practical way forward for this new class of vehicles. And OEMs, most of whom were looking to leverage tax incentives and excitement around ESG initiatives, will pull back on their expansion into electrification – much the way Ford has over the past 6 months.
Your Partner in a Better Remarketing Experience
Regardless of where things are headed in 2024, our team at FLD is looking forward to what’s in store. We invite you to follow along by emailing us at [email protected] to sign up for our free quarterly White Metal Market Report, an in depth look at the factors driving vehicle remarketing and the wholesale used vehicle market.
If we were to give fleets one piece of remarketing advice as we head into 2024: Don’t wait to sell used assets.
Not at a time when so many unforeseen factors could end up costing your fleet literally millions of dollars, just like it did the ones who held on to used vehicles when we implored customers to begin selling at the top of the used market in April 2022.
Don’t get caught holding used assets that – as we’ve seen over the last year – could end up being worthless. Especially at a time when new vehicle allotments are returning to normal, and fleets need to prepare for the brave new world ahead. Doing so could be disastrous.
Call the seasoned experts at FLD: Remarketing is all we do. We won’t let you down.
Our only goal is to help make your life easier while saving you a meaningful amount of time, money and resources. We’ll give you a quote on any used asset in hours and get you paid in one fast, easy transaction that takes about a week.
And with our proprietary OVRView app – you can manage your entire remarketing universe from any device, anywhere, anytime it’s convenient for you – it’s just that easy?
To learn more, give us a call at 1-800-754-1522, or email [email protected] for a free 5-minute assessment of your remarketing landscape.
To read Part 1, ‘The Wholesale Used Work Vehicle Market 2023 Overview’, click here.
About the author
Bill Bishop is SVP of Sales and Marketing at FLD Inc. and a recognized expert on the wholesale used vehicle market. He can be reached at [email protected].