LAWRENCEVILLE, Ga.–Heading into the fall, credit union loan officers should pay close attention to the values of luxury cars.
According to Black Book the prestige luxury car segment, followed by a handful of other luxury type segments, have shown the biggest depreciation heading into fall over the last ten years.
Dating back from 2006 up to 2016, prestige luxury cars have had their prices drop an average of 5.63% during the months of July, August, and September, Black Book reported.
Last year, prices for this segment dropped 5.9%, and in 2009 prices saw their largest three-month plummet (10.6%). Vehicles in this category include the Audi A8; BMW 7-Series; Lexus LS/SC; Mercedes-Benz 400, 420, 500, 600; and the Porsche Panamera.
Luxury car (-5.23%), full-size luxury CUV/SUV (-4.83%), and mid-size luxury CUV/SUV (-4.83%) are the segments that have seen the next-highest depreciation entering the fall season, looking at data over the last ten years.
“Dating back to 2006, we have seen a number of factors contribute to the rise and fall of used-vehicle prices, many of which are supply- and demand-related,” said Anil Goyal, senior vice president of automotive valuation and analytics at Black Book.
“When looking at the three-month retention average among all segments entering fall over the last ten years, many of the hardest-hit vehicles are in the luxury segments, which have struggled with retention strength due to increasing supply levels and higher MSRPs, which can lead to more volatile retention swings during this time of the year. What’s more, many of these luxury vehicles are now seeing slightly lower demand as car shoppers look to less expensive non-luxury vehicles that now offer technology and features that rival that of luxury types.”
Not surprisingly, full-size pickups (ten-year average Q3 depreciation of 1.67%) and small pickups (-1.78%) have seen the most retention strength in the three months entering fall. Lower supply levels and strong demand over the last several years has contributed to this placement among their car and truck peers, Black Book said.