Full-Size Trucks Vs. Alt-Energy Vehicles: Polar Price Opposites
Throughout 2013, dealers at auction have seen full-size truck prices spike, while alternative energy vehicles have consistently softened throughout the year. Now the two segments sit at opposite ends of the spectrum, as the full-size trucks tout the strongest price retention out of all segments, and the alternative-energy vehicles have seen the biggest price declines as of late.
In fact, according to NADA Used Car Guide’s October “Guidelines” report, large pickup prices continue to rise more with each passing month, as year-to-date growth hit 8.7 percent in September, an increase of 0.2 points over August’s figure of 8.5 percent.
On the other hand, here is an example of the softening of rates among alternative energy vehicles.
Despite the Honda Civic Hybrid costing around $5,500 more on average as a new vehicle than its Civic counterparts, KBB indicated earlier this month the used vehicles of the Civic Hybrid from the 2003 through 2006 model years all fall below the price of the Civic LX.
In terms of auction value, analysts pointed out the 2007 model-year Civic Hybrid costs only $100 more than the Civic LX model, and the 2008 model year for both the Civic Hybrid and Civic LX cost the same at $8,200 each.
To get some insight into these trends Auto Remarketing chatted with Alec Gutierrez, senior analyst for KBB.
Interestingly, Gutierrez said that waning consumer interest in the alternative energy segments is not a factor in recent price declines, but a level of consumer caution might be at play.
“In terms on consumer interest, I wouldn’t necessarily say that consumer interest is waning; I would just say that it’s not growing and has become very stagnant,” he said.
The face values of the hybrid and all-electric vehicles are still high, even in the used market, and with price cuts and incentives on the new variants of these vehicles, Gutierrez said the pre-owned models “aren’t gaining a lot of traction.”
Gutierrez also noted that for the all-electric vehicles, such as the Nissan Leaf and Chevy Volt, consumers are still concerned with driving range, as the technology is still relatively new.
And the all-electric vehicle prices are likely the softest at auction at the moment, he said.
Also, advancements in the fuel-efficient compact car segment might be turning consumer interest away from alternative-energy vehicles, as well.
“With the more traditional hybrid, the Toyota Prius is always going to be pretty popular, but with so many advancements in fuel efficiency for the compact cars that are available at a much lower price point is causing a lot of consumers to not jump full into the alt energy category,” Gutierrez said.
When asked how manufacturers might contribute to reversing this trend — as used prices and residuals for this segment continue to fall — Gutierrez said they would have to change their tune on the new-car side.
“Manufacturers would have to consider moving away from some of the lease promotions that they are running right now on the new side … When you talk about how you can go lease a brand new Leaf for $199 a month, or a Volt for around $259, these rates are just very attractive. This is pushing prices down for the used variants,” he explained.
And in the meantime, we will most likely see this segment continue to decline.