New truck sales at dealerships are declining sharply as financing conditions become more challenging, though favorable offers in the used-truck market are offering some respite.
According to a report from heavy-equipment research firm IronAdvisor Insights on April 11, dealers noted a 13.9% drop in new truck orders year-over-year during the first quarter. This report included feedback from dealers across 35 locations, fleet operators, and other industry experts.
Tariff Uncertainty
The report indicates that low freight rates, high interest rates, tariff-related uncertainties, and rising new truck prices are making lenders hesitant. Many are cautious due to the trucking industry’s recent recovery from a prolonged recession, as highlighted by IronAdvisor’s Director of Research, Jarrett Harris, in a discussion with Equipment Finance News.
“Lenders are particularly sensitive to changes in market conditions, including interest rates and the creditworthiness of fleets and owners,” he stated. “It doesn’t take much for them to feel uneasy, and there’s plenty to be concerned about.”
In the first quarter, new truck prices rose by 3% compared to the previous year, which surprised several dealers, especially considering inventory levels were relatively high. Increased prices have complicated financing as lenders now require larger down payments, according to Harris.
“The disconnection between a fleet’s financial health and the price of a new truck is becoming increasingly evident.”
— Jarrett Harris, Director of Research, IronAdvisor Insights
Additionally, tariffs imposed by President Donald Trump are pressuring dealers, as truck manufacturers are adding surcharges of $3,500 to $4,000 on new vehicles, regardless of whether they are produced domestically or internationally.
Lenders Seek Efficient Dealers
For commercial truck dealers aiming to secure new lenders, efficiency is crucial in building trust, stated Kirk Mann, executive vice president and head of transportation at Mitsubishi HC Capital America, during the recent Commercial Vehicle Business Summit. “Ultimately, lenders can only handle a limited number of relationships and applications,” he explained. “We need to partner with dealers who demonstrate efficiency.”
Used-Truck Market as a Positive Note?
As new trucks become more expensive and harder to finance, more fleet operators are shifting their focus to the used-truck market to satisfy replacement needs. While used-truck prices seem to be stabilizing, they’ve significantly decreased in recent years, creating advantageous options for fleet owners, according to Harris.
“There’s a clear replacement need, especially with many fleets becoming outdated,” he noted. “We’re observing many operators either choose to renew warranties and extend the life of their vehicles or search for high-mileage used trucks that still have a lot left to give.”
However, the widening gap in prices between new and used trucks is leading to inconsistencies in the market.
“Six years ago, a 5-year-old used truck with 500,000 miles sold for $45,000 to $60,000 while a new truck went for $140,000,” a dealer from Traton mentioned. “Now, a new truck costs $195,000, while that same 5-year-old used truck is valued at just $22,000 to $23,000.”
The upcoming Equipment Finance Connect event will take place at the JW Marriott Nashville on May 14-15, 2025. This event serves as a platform for equipment dealers and lenders to exchange insights, engage in relevant discussions, and network with peers. More details and registration can be found here.
