With low inventory in the farm machinery, commercial truck and construction equipment sectors, a new report finds a narrowing gap between auction and asking values. A report by Lincoln, Neb., based Sandhills Global said that, historically, inventory levels are a driving factor in the auction/asking value gap, which typically widens when inventory levels are high and narrows when inventory is low.
Used high-horsepower (300 horsepower and greater) tractor values were up 14.7% year-over-year at auction, while asking values increased 11.6% year-over-year in November.
The current auction/asking gaps shows high-horsepower auction values 14% below asking values. When high-horsepower tractor inventory previously peaked in March 2015, auction values were 22% below asking values.
The key metric used in the overall report is Sandhills’ Equipment Value Index (EVI). Buyers and sellers use the information to monitor equipment markets and maximize returns on acquisitions, liquidations, and other business decisions.