Depreciation trends stabilized to close out 2016, with depreciation rates for all cars and trucks falling into seasonal patterns.
On a month-to-month basis, the average price of a used vehicle for model years 2011-2015 depreciated by 2.4% in December. Cars overall realized a depreciation of 2.7%, while trucks depreciated at a slightly lower rate of 2.3%, according to Black Book.
Over a 12-month period, the average price of a used vehicle for model years 2011-2015 depreciated by 17.3%. Cars ended the year with a depreciation change of 20% compared to the year-ago period, while trucks ended the year with a 15.5% depreciation change compared to the same time last year.
"The depreciation rates for all cars and trucks followed seasonal patterns, with higher depreciation in Q4," said Anil Goyal, Black Book's senior vice president of automotive valuation and analytics. "That being said, with the spring season around the corner, it will be interesting to see if smaller cars experience higher levels of seasonality lift, especially with the recent bump in gas prices.”
Overall, domestic trucks experienced the lowest levels of depreciation, according to Black Book. Over a 12-month period, the segment realized a 15.2% depreciation change. Small pickups in particular held their value the best out of all vehicle segments, depreciating by only 8.5% over the 12-month period.
Compact vans ended the year with both the highest year-over-year and month-to-month depreciation change. On a year-over-year basis, compact vans saw values drop by 25.3%. On a month-to-month basis, compact vans experienced a 6.1% drop in value, the largest single-month drop of any segment over the last 12 months. Vehicles in this segment finished December with an average segment price of $9,975, a 25.3% drop from year-ago levels, Black Book noted.
Other vehicle segments that saw depreciation rates exceed 2.9% on a month-to-month basis in December included sub-compact cars; sporty cars; near luxury cars; prestige luxury cars; minivans; and midsize luxury utilities.
Sub-compact luxury CUVs realized the best retention rate out of all segments on a month-to-month basis (0.3%), according to Black Book. Vehicles in this segment finished December with an average price of $19,133, a 21.4% drop compared to the same time last year.
Apart from sub-compact luxury CUVs, four other vehicle segments realized depreciation rates at or below 2% on a month-to-month basis. The included small pickups (0.9%), full-size pickups (1.4%), full-size car (1.9%), and compact luxury utilities (2.0%)
Editor's note: This story originally appeared on F&I Showroom, which is a Bobit Business Media publication.
Originally posted on Automotive Fleet
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