With record new truck orders filling build slots well into 2019, many motor carriers are openly wondering how they will be able to increase truck count while taking advantage of strong freight rates currently dominating the market. With the truck backlog forcing some fleets to hold on to trucks longer than they normally would, many fleets are turning to the auction market to fulfill a growing need without breaking the bank or waiting too long on a huge backlog list.<\/p>\n\n\n\n
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While owner-operators typically dominated the auction market, motor carriers large and small are now turning to the auction market with unabashed enthusiasm. Still, owner-operators make up 70 percent of the overall auction market. With later model equipment becoming available and an increasing number of fleets entering the auction segment, the auction market is currently anybody\u2019s game. <\/p>\n\n\n\n
The ability to quickly put trucks on the highway represents\nthe number one draw for owner-operators or fleets looking to make acquisitions\nat an auction. Yet, that is not the only big draw for those looking to an auto\nauction for their fulfillment needs. In some cases, the geographical area may\nbe a big deciding factor. In other cases, the auction channel offers great\nflexibility in purchasing specific pieces of equipment. You can also survey the\nequipment in a far more in-depth manner than ever before, thanks to a\ncombination of online and in-person outlet sales. <\/p>\n\n\n\n
Many auctioneers offer auctions with a high frequency,\nallowing potential buyers and sellers to participate daily. This makes for a\ngreater volume and a higher level of flexibility when it comes to finding the\npiece of equipment you are looking for at a lower price than you would pay at\nthe dealership. <\/p>\n\n\n\n
If you are talking about comparing buying equipment at an\nauction as opposed to buying from a dealer, it is no secret that the dealer is\ngoing to charge retail price, whereas at an auction, you will have the\nopportunity to purchase something for less money than possible at the retail\nlevel. Unfortunately, 2018 was not the year to find cheap vehicles, no matter\nwhere you looked. <\/p>\n\n\n\n
The reason for this can be found in the tight market. There\nwas essentially no depreciation for four-to-six-year-old commercial motor\nvehicles in the auction market in 2018. While that is an unusual situation, it\nspeaks to the red-hot nature of the truck-buying market in 2018. For fleets not\ninclined to dispose of units, the 2018 pricing regime represented an attractive\nproposition. <\/p>\n\n\n\n
Why Turn to an\nAuction?<\/strong><\/p>\n\n\n\n Auctions are essential because comparable equipment can be\nfound on the retail and auction market, but for vastly different price points.\nWhile 2018 has been an outlier in this regard, simply because of the nature of\nthe market, auctions are generally the go-to for fleets looking to save some\nmoney on equipment that is virtually indiscernible from that found on a\ndealer\u2019s lot. <\/p>\n\n\n\n Volume buyers also find auctions to be particularly useful.\nFleets who buy in volume often do their own reconditioning, so being able to\npurchase a large volume of vehicles while completing their own inexpensive\nrepair work saves motor carriers quite a bit of money. The challenge today is\nfinding late-model, lower mileage equipment. <\/p>\n\n\n\n The fact is this: Equipment on the used truck side is in\nhigh demand and is hard to come by, which brings a premium to the marketplace.\nThis paradigm has created a shift in the auction market. You can find trucks at\nauction with a remaining balance of OEM warranty. The strong freight rates,\nwhen combined with the current market environment, have brought far more\nlate-model trucks to the used truck market.<\/p>\n\n\n\n Not All Auctions Are\nCreated Equal<\/strong><\/p>\n\n\n\n It is easy to see why anyone with a late-model truck with\nany remaining warranty has been actively participating in the auction channel.\nThe auction channel methodology is also very attractive due to the fast-paced\nenvironment. Though this can be intimidating to newcomers, seasoned\nauction-goers know exactly what they are looking for and are ready for the\neveryone-for-themselves environment found at auction houses. <\/p>\n\n\n\n In some auctions, there are people that basically walk you through the auction and how to make a bid. They outline what to look for and how the auction works. For online auction-goers, resources are available. It is a matter of being confident in what you are doing and trusting the auction to provide the required information. <\/p>\n\n\n\n <\/p>\n\n\n\n <\/p>\n\n\n\n <\/p>\n\n\n\n To get involved in a trucking equipment auction, interested parties need only contact a representative of the auction house and let them know what your particular needs are. Auction houses generally offer equipment lists for upcoming auctions that include photos, spec information, consigned equipment, and contact and follow-up information for company headquarters. <\/p>\n\n\n\n For most auctions, registration is not required to review\nequipment sales online or for online inspections. For in-person inspections and\non-site auction attendance, participants will generally have to register.\nRegistration generally requires a simple process of either a cash deposit or a\nletter of credit from your bank.<\/p>\n\n\n\n Fleets should also contact the auction house to find out\nmore regarding what kind of reconditioning is performed on the units before\nthey are put up for auction. It is also important to learn what kind of\nequipment guarantee the auction house offers. While buyers need to do their own\ndue diligence to determine if the equipment meets their needs and what kind of\nterms they will accept if it doesn\u2019t, auction houses generally provide a high\nlevel of checking and maintenance. <\/p>\n\n\n\n Selling Equipment at\nan Auction<\/strong><\/p>\n\n\n\n Selling trucks at an auction is generally an interesting\nproposition. Why? Because it pits the buyer and seller against one another at\nopposite ends of the deal. One wants to sell for the most dollars while the\nother wants to buy for the least. When selling a piece of equipment, the seller\nmust be okay with people looking at the piece of equipment whether it be\nin-person or evaluating specs and photos online. <\/p>\n\n\n\n It is important that anyone at the auction bidding on your\nvehicle have a reasonable expectation of what they may get out of the vehicle.\nThe seller should have an idea of what they will monetize out of a given asset\nand the buyer should have an idea of what condition the asset will be in and\nhow long \u2013 relatively speaking \u2013 it should last, given the application\nadvertised. <\/p>\n\n\n\n Once both parties have come to an agreement regarding the\nequipment, the next step should be entering into a consignment agreement.\nAssuming the consigner is agreeable with the terms, the seller would then agree\nto put the piece of equipment up at the next auction. <\/p>\n\n\n\n One thing a seller must consider is that they will have\nlittle more than a best guess price estimate. This best guess will influence\nwhether they want to place a reserve price on the vehicle. If they place a\nreserve, they run the risk that if the truck doesn\u2019t sell at the reserve price,\nit does not sell at all. It is important that the seller pay close attention to\nwhat they are willing to accept out of the sale. <\/p>\n\n\n\n The other drawback to putting a reserve on a truck is that\npotential buyers may be put off by the reserve price. If the amount of the\ntruck sale is not disclosed up front, it may prevent auction-goers from bidding\non the vehicle. <\/p>\n\n\n\n Auction-goers usually put effort into traveling, inspecting,\nand then going through the process of registering to buy, so if they feel like\nsomeone might have an unrealistic reserve number placed on a sale, they may\nmove on to bidding for another vehicle.<\/p>\n\n\n\n Will a reserve amount, if too high, cause a vehicle to not be sold at all? There is certainly potential of it, which is why sellers must carefully evaluate what they are okay with. In the end, having a piece of equipment that is in high demand will ensure a strong transaction price. Additionally, buyers are in such a great need for equipment that they may be willing to look at something different from what they thought they needed to make it work. <\/p>\n\n\n\n <\/p>\n\n\n\n <\/p>\n\n\n\n <\/p>\n\n\n\n Whether it be looking for alternate powertrain options or even renewable fuel-driven vehicles, buyers and sellers are working in an evolved market. Auctions represent themselves as a great place to unload vehicles or purchase vehicles at a price that cannot be found at the retail level. There is less equipment available because more of it is in use and the demand situation is strong. Are you a trucking company<\/a> looking to procure equipment at a price that won\u2019t break your bank? Or are you a trucking company looking to offload equipment that is still in great working order to another company that needs that exact type of equipment? In both situations, your best bet may be to evaluate your nearest trucking equipment auction. <\/p>\n","protected":false},"excerpt":{"rendered":"