Andrew Obin: Are you calling the bottom of the cycle, because that’s what you’re – and I was – and have you called – I don’t think you’ve called the bottom of the cycle before, it seems that you’re basically saying cycle will bottom sometime around the summer?
Rusty Rush: Yeah, I think so. I think you’re going to have a little carryover. When it comes – we’re talking about truck sales, I’m not talking about aftermarket business. Aftermarket business is totally different. But when it comes to Class 8 truck sales, I think that the summer is going to be a little more difficult than what we’ve experienced. There is some carryover to Q1 from finishing up the year. Remember, we’re at the end of the train. We don’t manufacture them. We deliver them. A lot of times trucks take bodies and things like that and it could be up to 60 to 90 days for those trucks to get delivered to our customer base, especially on the vocational side. So, yes, I would tell you that the little trough for us in Class 8 deliveries will probably be sometime this summer.
But again, like I said, I do expect the freight market cannot continue. I don’t believe to be as rough as it’s been in the last couple of years. So, I would expect that to pick up. And along with what the EPA emission laws of January 1 of 2027, I do firmly believe will be a pre-buy. With that question, most people expect 2026 to be the biggest year in history, given decent economic conditions overall in the country, right? So, yeah, I mean, I would tell you that truck sales will be softer in a second on the summer in the Q2 and Q3, than what we have seen. But again, we believe, I’d say 22%, I think the majority of it will be in the summer, yes. But, I expect to start bouncing back by the end of the year.
Andrew Obin: Excellent. Can you just remind us when is used pricing bottoming?
Rusty Rush: Well, I wish, Andrew, if I could tell you that, you might even give me a raise, okay? Which I would gladly take. But anyway…
Andrew Obin: I think they’re fine as it is.
Rusty Rush: I would agree with that. I’m probably overplayed. Did I say that? Okay.
Andrew Obin: Yeah, don’t say that.
Rusty Rush: No, Andrew, I’ll tell you, I will say this, use the decline in used truck pricing has continued. Well, it is not as dramatic, it is what it was a year-and-a-half ago, it is still declining more than normal. I think our average used truck price was like $53,000. And when you look at average and if you go back to 2019, or was it go back in the high-40s or something like that 47%, 48%. So you got to believe with the inflationary of what trucks cost now that spread has gotten, it is not only so far it could go but the problem is that pricing is one thing, demand is the other, right? And when you’ve got spot markets which are the main driver of used truck values in such rough shape and down so much, it’s still, I think it’ll happen quick when it happens you watch.
I can’t tell you even though, because that means I guess they don’t get my raise, but exactly when, but I would tell you I got to believe sometime before the years out, but I don’t look forward to the next. It’ll continue to decline at a faster rate, but not as fast as it was declining. There’s still trucks being put on the market, I’ve heard of a couple of batches this week in big numbers, people are trying to unload, which puts pressure on it, puts pressure on the market. But the most important thing is to create demand, which means you got to get the spot market back. You’ve got to have some of these others, this over-the-road business spot market back to really stabilize it and to make these truck values go up. Again, it’s still decelerating faster than what I would say normal percentages are, right?
Andrew Obin: Just a question, in terms of macro, and I always, I love asking this question just because you have great systems, can you just take us around the country and just by region, how is the economy holding up relative to your expectations maybe 6 weeks ago? And I know that it’s only 6 weeks, but you do have some of the best systems of anybody I cover. Just maybe you can take us around the country and tell us what’s Rusty Rush’s 30,000-foot view of the U.S. economy?
Rusty Rush: Well, obviously the biggest concentration we have would be in Texas, right? And Texas is doing just fine. Okay, our Texas stores are still – the state’s still growing. Ohio is growing state in the nation and from both population and a business, perspective for businesses still coming in here. Florida is doing great. We’re getting through, I would tell you, a little softer maybe lately in Ohio, I think. But, I think, Illinois is decent and doing well. We’ve got West California is still in good shape. I worry about California with the new 2024 CARB laws that came in it. By the time we get to the back half of the year, that they may be suffering on the truck sales side, right now, they’re doing fairly well.
But we make sure to have some inventory and things like that to carry over into the markets out there. So Oklahoma is still good, going strong. Arizona is decent. So pretty decent across the board. Like I said, a little softness in the state or so. And in Ohio, for whatever reason, I’ve noticed that a little softer up there recently, but I don’t expect that to hold up. I expect that to come back. So I hope it gives you some, I mean – go ahead – not just to see geographic markets, but other markets, breaking it out in the good market, construction is better. That’s what we hope will help keep the order book [ph] better with the growth and on the hits that we’re seeing over-the-road business both for the large customer and for the small person which you know it pretty much out right now out of our mix.
