Even three years on, some of the covid pandemic’s effects will not soon abate. While business has mostly returned to normal in our day-to-day life, the global economic situation has yet to revert to how it was in 2019. From further shutdowns in China to the war in Ukraine, the world has not stopped delivering surprises to the global economy, and if there’s one thing economies don’t like, it’s surprises. When it comes to economies, the more boring the news, the better.
The automobile market has been radically impacted by these unpleasant surprises. In fact, you can well argue it’s the market that’s been hit the hardest. The price of new vehicles has skyrocketed thanks to supply chain disruption, which resulted in the used car market also seeing price hikes, with that market peaking in early 2022. If you take a trip to your local used GMC dealership, you’ll see that prices on used trucks have fallen slightly but are still above their 2019 numbers. If you want to purchase used, though, you should do so soon: the used truck market is forecast to become more expensive by year’s end. Now is the time to act. A look at how this market has been developing can tell us a lot about the automobile economy at large and allow you to factor that when you head out to purchase a used truck for you and your family.
Trucks Are a Unique Commodity
To understand the trajectory of the used truck market, it’s important to note that trucks are unique among automobiles. While plenty of SUVs offer opportunities for laborers, trucks are first and foremost for work. This means that the truck market’s success, or lack thereof, is inextricably linked to labor demands in a way that sedans and SUVs are not. For instance, in 2020, sales of pickups varied wildly depending upon the state in the US. States that were seeing a covid surge saw declines as work shut down. States that were currently free of a covid surge saw truck sales fly up as industries tried to make up for lost time.
This was far different from sales of sedans and SUVs, which declined across the country as it’s easier to put off buying a leisure vehicle during uncertain times. If you need a truck, though, you likely need it for work, which means it cannot wait no matter what’s happening. This means trucks need to be viewed differently. While style, infotainment systems, and comfortable seating all matter for them, their purpose as labor vehicles drives the market the most. Can they perform? Good. Get them to work.
The Used Market Is Bursting at the Seams
If you’ve glanced at the used car market or just the news, you know it’s a bit more expensive than pre-covid. Despite that, it still offers relief from new vehicle prices, which are even higher. Buyers would be smart to check out the used market before purchasing something new. That goes doubly for trucks, which have a long life span. If you buy a used truck, you’re likely getting a quality vehicle because they’re built to last and built to undergo heavy performance. I’d get on that sooner than later, though. There’s reason to believe the used car market will become more expensive across the board, but there’s also reason to believe the used truck market specifically will become tighter. Why? Infrastructure projects.
Infrastructure Projects Will Raise Demand
From the 2021 covid recovery legislation to the 2022 infrastructure bill to the 2023 inflation reduction act, a lot of money has been poured into the United States infrastructure system over the past three years. It’ll take time for that money to settle and for the projects to get fully underway, but it won’t be long. And you know what those infrastructure projects will need? Yep, that’s right: trucks. Big boys like the GMC Sierra series will be in high demand. When there’s work to be done on bridges, rail systems, and highways, these trucks are priceless. Moving equipment around becomes much easier now that trucks like the Sierra have sky-high payload and towing numbers.
Here’s the thing, though. Infrastructure projects are not only happening in the United States. We live in a globalized world, which means the trucks we see on the road are the ones seen overseas, too. Countries like China are industrializing and updating parts of their country, and they are just as interested in powerful pickup trucks as companies are here in the US. With global trade competition between the US and China growing daily, each country will want to outdo the other. Just as China is expanding its rail systems, the US is expanding its Amtrak systems with a goal to have a nationwide Amtrak system come the mid-2030s. This competitive streak will only spur further projects. It’s not like the US and China are the only ones doing this; India has major infrastructure plans that extend into the next decade. They’ll be looking for capable vehicles to assist with the labor.
Okay, but What Does That Have to Do With the Used Truck Market?
At first glance, nothing, right? It’s doubtful companies and governments will be hunting down used trucks on Craigslists or scouring the pages of the local newspapers to see who is offering a used Sierra. However, they will be eating up all the new models, putting pressure on the new market, and raising prices further. This, in turn, will lead to the average consumer having to turn to the used market. Great news if you’re someone who wants to sell their truck, but not as great news if you want to buy a used one.
Sellers will see no reason to lower their prices. We may soon see those used prices return to where they were in late 2021 and early 2022. So, if you’re interested in a used truck, I might suggest heading down to the dealership ASAP. You might regret it if you wait until the end of the year. The benefit of buying used or new right now is that your truck will likely keep much of its value, and you can sell it for a bit down the line.
A Pricier Used Market Can Be Good
If you buy a quality truck now, you might see a nice return on the investment if you keep it in tip-top shape. With the used market not likely to see a radical decline anytime soon, your eyes might be popping out when you see how much individuals or dealerships are willing to spend to get your truck in a couple of years. In a sense, a pricier market isn’t bad; it’s just different and requires different long-term planning than the used market we’ve been familiar with in the past.
Paying more now might result in receiving a solid chunk of change in the future as long as you keep an eye on the trends and sell smart. That said, things can change. It’s entirely possible EV trucks, which are rapidly gaining momentum, might well disrupt the current truck market. If covid has taught us anything, it’s that we should always be a little unsure of what the future holds. But still, I’d get that used truck sooner than later.
