HOW MUCH WILL USED TRUCKS BE WORTH IN 2022
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According to research, it is said that the value of used trucks is skyrocketing as its price is on the increase. Over the years before now, there has been high demand and supply of new trucks, making used trucks of less importance; this is because of the ideology of “why make use of the old one, while you can get a new one.” However, this narrative changed with the hit of the pandemic, as the pandemic disrupted supply chains and caused shortages in critical auto components like semi conductors, computer chips and this brought about a slow and tight new vehicle inventory, as inventors are yet to recover from the corona virus pandemic.

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As a result of this sad situation, it had an immediate effect on the demand of used vehicles. Analysis has it that in 2020 after the pandemic that the U.S auto production fell 23% as a result of disrupted global supply chain, caused by the pandemic. Though the automotive began to abound, it however fell another 8% this year 2021. This is to say that it is taking the automotive industries a bit of time to stride back and bring about normality in the cost of used trucks.

According to some analysts however the increase in value and cost of used trucks is partly because its tax refund season, which is typically the busiest part of the year for used car sales to retail customers. Also analysts are of the view that high prices of new vehicles are also driving some shoppers to switch to used vehicles instead, but as bad as things are for new car prices, things are even worse for used vehicles. The lack of new trucks available have succeeded in creating absolute frenzy or panic in the cheaper used car market, thereby causing an increase in price for cheap used trucks.

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According to statistics, in February 2020, used truck prices were up to a staggering 39.8%, this is because the consumer does not have their first pick right now, so they are going for their second or third pick which is available at the moment. The saying that “when the desirable is not available then the available becomes desirable” comes in handy in this case. Consumers can not afford to wait for production to release new vehicles, so they are trooping into the used truck market, to get the ones they can lay hands on. This has led to the inflation in prices of these used trucks. Based on the March 2020 statistics, the price of used trucks rose to a 40% and ever since then, prices of these used trucks are still on the rise.

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Some analysts are however of the opinion that the decrease in vehicle production is worse for the market than it might appear at first and this is because the car market is continuously losing vehicles to a combination of life cycles and accidents. Analysts are also of the view that the shrinking shortage in supply is not the only factor driving prices higher. According to Dan Hearsch, a managing director in the automotive and industrial practice at AlixPartners, he is of the opinion that people moving out of big cities as a result of the pandemic and health concerns; chose not to take public transportation and such drove them to buy vehicles. From this view point, it is evident that there are diverse perceptions as to the cause of the rise in the value of used trucks, but one thing remain the leading cause, which is the pandemic hit, leading to disruption of production and supply.

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Having discovered that there is an outrageous increase in price of used trucks, the question posed is “what will it take for the price of these used trucks to normalize come 2022?” Research has it that, according to analysts, the solution to this inflation is for the supply chain issues to be resolved, since shortage in supply chain brought about inflation, resolving such issue will bring about a light in the end of the tunnel. Again, according to analysts the production ought to return to normal levels, its original position this is because with production of new trucks on high level, there will be little or no demand for used trucks as the new truck market will be flooded by buyers.

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Balance can only be achieved in the auto world when supply equals demand. However, resolving this issue will not be an easy task, as there are different factors causing this shortage in supply chain; there is shortage in labor, allocation of steel and the likes. This is to say that there is actually a lot of disruption; according to Hearsch there are also shipping issues and delays at ports which are problematic in the production and distribution of these trucks. Industry experts have however asserted that things will take well from 2022, down that things will return to normal for the used car market from 2022 and beyond stating that, once the problems causing lack of production are resolved, prices will normalize both for new and used trucks.

Conclusion

According to research, it is said that the value of used trucks is skyrocketing as its price is on the increase. Over the years before now. On this note, let us therefore hope for the best come 2022, as there is a high probability that the skyrocketing price of used trucks will return to normal.

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