Overdrive survey details small fleet truck purchasing preferences

It’s hardly an insight to state small fleets and owner-operators prefer buying used trucks to new. That’s been the conventional wisdom for ages and late last year, our sister publication Overdrive confirmed it in a purchasing survey of its owner-operator, driver and small fleet audience.

In that November 2021 survey nearly 56 percent of responders who had previously acquired equipment claimed their most recent addition had been a used truck purchase. That number may seem small, but the survey wasn’t binary in its response options. Beyond buying used or new, other acquisition options including buying or building a glider kit, leasing a truck and renting a truck, among others. Of the Overdrive responders who had bought a truck, 64 percent had chosen used over new. Again, that might not surprise you.

What was more illuminating from the Overdrive survey results wasn’t what owner-operators and small fleets buy, but where they buy. And how they finance those purchases.

The used truck market might be the preferred source for owner-operators and small carriers, but once a customer decides it’s time to buy another used truck, a franchised truck dealer has little to no advantage in acquiring their business over anyone else. Many customers also aren’t eager to buy at all, and when their circumstances change and a purchase becomes necessary, oftentimes franchised truck dealers are actually at a disadvantage due to the inventory they carry.

First, let’s examine where customers seek out equipment. Among the more than 200 used truck purchasers who responded to Overdrive’s survey, only 27 percent said their last vehicle purchase came from an OEM-affiliated truck dealer. Considering the investment franchise truck dealers have made over the last few years to strengthen their used truck departments, this number is alarmingly low.

Independent used truck dealers earned a higher customer share at 33 percent, but even that number seems low considering how many more purchasers were available. That only six in 10 used truck customers buy from a dealer means there is a huge segment of customers dealers are failing to reach (or convert).

Where is everyone else buying? There’s been chatter recently in the used truck space that skyrocketing auction prices have been partially driven by end users who are searching for good deals at auctions to avoid the retail market. That may be true today, but that wasn’t the case in November; only 3 percent of Overdrive’s responders said their truck came from an auction.

Among survey responders, private-party sales are accounting for most purchases dealers miss, nabbing 30 percent of the used truck market share.

Looking further at Overdrive’s data, it’s possible model year (MY) preferences are driving this segment of the market. Fifty-nine percent of responders to November’s survey said their last used truck purchase came in 2016 or later, but only 21 percent are operating a MY 2016 or newer tractor. To some degree that gulf makes sense, but even extending truck MY to 2010 only accounts for 43 percent of responders. Conversely, 31 percent of survey responders are running a MY 2003 or older truck though only 9 percent said their purchase came in 2003 or before. Aftertreatment and advanced vehicle technology still turns off a lot of buyers.

Another interesting nugget in Overdrive’s survey was how these purchases were financed. Less than a quarter of survey responders (22 percent) whose most recent purchase was a used truck said their financed the purchase through a specialty financing company — like the ones run by OEMs and aligned with their dealers. Even more surprisingly, 38 percent of customers said they paid cash. Bank loans followed closely at 35 percent.

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Similar to the auction sentiment above, those numbers might not be indicative of the current market conditions, but they do show the challenge dealers face when marketing their financing solutions in the secondary market.

There is a large segment of used truck customers who are not searching for late model used trucks. There’s also a large segment of customers who are aware of their payment capabilities before initiating contact with a seller and know exactly how much they have to spend. The overlap between those two segments is substantial, and many of the buyers that fall in both camps likely never even approach a dealer when looking for a truck.

None of this may mean much to a used truck dealer today, with overall market demand so high and inventory turn rates regularly setting records. And the used truck market isn’t expected to slow down this month — or this year.

But at some point, in the coming years market cyclicality will return, and when it does, dealers looking to engage with small fleets and owner-operators to stabilize their sales would be wise to remember what those same customers revealed about their buying preferences last November. Not everyone wants a 3- to 5-year-old sleeper; nor can they afford it.

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