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Pickin’ Off the Cherry Pre-Tier 4 Semis
One watershed year for semitrailer trucks was 2007. That was when most manufacturers switched over to Tier 4-compliant engines that often required the use of particulate filters and diesel exhaust fluid (DEF).
We’re still feeling the impact of that EPA mandate today as is reflected in the prices that pre-Tier 4 trucks are bringing at auction. Second-tier buyers (buyers who purchase used trucks) in the truck market are aggressively bidding on 2005, 2006, and 2007 vehicles so they can avoid having to handle DEF. If such a vehicle also has low miles, its value is increased simply due to the fact that nine-plus years later, so few pre-Tier 4 trucks with low mileage are now available.
The Pocket Price Guide provides proof of that fact. Only day cab trucks (a configuration preferred by farmers) with less than 500,000 miles made this list. Those 41 trucks were gleaned from over 700 transactions that have occurred since last spring.
At a time when used semitrailer truck values have generally shrunk, these trucks prove to be a preferred commodity.
“It is certainly getting increasingly difficult to find low-mile pre-Tier 4 trucks,” says Bill Nelson with US Auctioneers. “That has created a solid price floor under the values of these vehicles.”
semitruck values have slumped
The good news for farmers searching out a pre-Tier 4 semi is that truck prices, in general, are experiencing a value slump, observes Rick Vacha of Ritchie Bros. “We certainly have seen their prices soften since 2013-2014, when there was a run-up in values supported by improvements in the general economy,” he says. “That offers an opportunity to get a value on a truck today.”
Examples in the Pocket Price Guide can assist in establishing a general value for the truck you’re interested in. Yet, that is just the start of your exploration into a possible buy.
The way that truck is equipped definitely has an impact on its auction value. Equally, if not more, important is the truck’s history. Who owned the vehicle, and how they used and cared for it is also key information. Ask for the previous owner’s name and contact information from the auctioneer prior to the sale.
Another factor that has an enormous impact on a semi’s value is whether it was owned by a farmer, notes Dan Sullivan of Sullivan Auctioneers. “Especially if that truck is being sold on the farm where it was used (such as at a retirement auction),” he says. “You can look around at the operation and get a sense of how the farmer cared for things. You can often walk up to the very person who drove the vehicle and ask about its use, service, and repairs.”
But how do you put a price on such information? If presale research finds that trucks similar to the one up for sale that day are going for an average of, let’s say, $20,000, is the farm truck worth $25,000?
“That’s a good question,” Sullivan says. “I think you could bid more than average and feel that the extra money is justified. That’s because you are less likely to buy a truck with mechanical problems from being abused by an employee at a truck firm, for example.”
The fact that the way a semi is equipped has an impact on its auction value is proven by the two Freightliners listed in the Pocket Price Guide.
Refer to the truck with 470,800 miles that brought $26,000 compared with one that had 458,319 miles and sold for $13,500. What accounted for this $12,500 difference? The answer lies in the fact that the $26,000 truck came with a higher rated rear axle, a longer wheelbase, aluminum wheels, and a wet kit.
Yet, value differences in trucks aren’t always so pronounced at auction. A good example of this involves the recent sale of three Freightliner day cab trucks. They all sold with similar use, ranging from 354,210 to 396,246 miles.
- Truck #1 sold for $25,300.
- Truck #2 sold for $25,200.
- Truck #3 sold for $25,100.
So you’d think the trucks were dead-on similar in how they were equipped. Not so.
- Truck #1 had a 450-hp. Detroit diesel, a 195-inch wheelbase, a 40,000-pound rear axle, and aluminum wheels.
- Truck #2 had a 515-hp. Detroit, a 176-inch wheelbase, a 46,000-pound axle, and a mixture of aluminum and steel wheels.
- Truck #3 had a 450-hp. Mercedes-Benz diesel, a 192-inch wheelbase, a 40,000-pound axle, all aluminum wheels, and a wet kit.
The lesson from these examples is that price alone doesn’t determine similarities.
“The challenge for farmers is to recognize how differently semis are equipped,” says Vacha. “Unlike farm equipment, semitrucks can be highly customized. So you need to adjust a final bid accordingly.”