LAWRENCEVILLE, Ga.–The depreciation rate on used vehicles, which had accelerated in the months leading up to December, stabilized by the close of the year, Black Book reported.
According to Black Book, the average price of a used vehicle for model years 2011-2015 depreciated 2.4% in December. The average price of a used vehicle for model years 2010-2014 declined 2.8% during November. Cars overall in December saw depreciation of 2.7% versus trucks, which saw 2.3% depreciation. All vehicles are averaging a 12-month depreciation change of 17.3%.
The 17% figure is more in line with depreciation levels seen before the Great Recession. Following the recession, used car depreciation slowed due to consumers hanging onto their cars longer.
In December, compact vans saw the largest drop in value at 6.1% on the month, the largest single-month drop of any segment over the last twelve months. Vehicles in this segment finished December with an average segment price of $9,975, a -25.3% change from year-ago levels ($13,355).
Eight segments saw a monthly depreciation of 2.9% or greater, five of which were cars (sub-compact car –3.5%; sporty car –3.2%; near luxury car –2.9%; prestige luxury car –2.9%) and three were trucks (compact van –6.1%; minivan –3.2%; midsize luxury utilities –2.9%), according to Black Book.
Sub-compact luxury CUVs saw the strongest retention during December at 0.3%. Vehicles in this segment finished December with an average price of $19,133, a 21.4% change from year-ago levels ($24,345).
Seven of the top eight segments with the strongest retention were all trucks (small pickups at –0.9%; full-size pickups at –1.4%; compact luxury utilities at –2.0%; full-size luxury utilities at –2.1%; full-size vans at –2.3%; and sub-compact crossovers at –2.3%). Full-size cars saw the strongest retention of all car segments at –1.9%.
"The depreciation rates for all cars and trucks followed seasonal patterns with higher depreciation in Q4," said Anil Goyal, senior vice president of automotive valuation and analytics with Black Book. "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.”