Last week, auction price depreciation broadened across the board, continuing a downward trajectory that began in May after tax season came to a close and one that will likely continue through the summer.

According to Black Book data, the average price of a used vehicle for models years 2009-2013 fell by 1.2 percent month-over-month in May.

Import cars saw the biggest declines with prices falling by 2 percent in May. Next up were domestic cars with a decline of 1.4 percent.

Once again, trucks were outperforming cars: domestic truck prices dropped by 0.8 percent, and import truck rates fell by 0.4 percent.

“The month of May saw a noticeable swing from beginning to end, and while overall depreciation finished at just -1.2 percent, the end of the month started to pick up steam,” said Anil Goyal, vice president of automotive valuation and analytics.

The largest depreciation rate was seen among the compact SUVs, which might be a natural market correction as this segment saw the strongest price retention in April. Last month, compact SUVs lost 3.6 percent (or $889) of their value to finish the month with an average price of $24,129. This represents a 3.9-percent drop year-over-year.

And while pickup depreciation is starting to ramp up — last week, trucks saw prices fall by an average of 0.28 percent, or $46 — they were still performing above the industry average in May.

In fact, compact pickups saw the strongest price retention in May, with prices rising by 1 percent. Compact pickups finished the month with an average price in the lanes of $18,290. And though rates were up from April, as used supply continues to expand, prices are being pushed down from 2014 rates. The average auction price for compact pickups in May represents a 4.5-percent year-over-year drop.

Not surprisingly after the tax season rush, seven of the top nine largest depreciating segments last month were cars: the upper midsize (-2.9 percent or -$350); entry-level (-2.8 percent or -$215); entry midsize (-2.6 percent or -$248); compact (-2.4 percent or -$220); prestige luxury (-1.7 percent or $582); luxury (-1.6 percent or -$345); and full-size (-1.4 percent or -$177).

Out of the car segments, premium sporty cars finished the month with the best retention, perhaps a result or warming weather and increasing consumer interest in sportier models. Prices for this segment stayed flat in May from April levels to finish the month at an average rate of $39,297. This is down a significant 13.3 percent from last May’s rate or $45,307.

Where Vehicle Equity is Headed

As for what’s in store for the coming months, Goyal said, “We anticipate June will show the beginning of summer seasonal patterns, with many vehicles showing ‘no sales’ at auctions due to lower buyer demand.”

And a report released by NADA Used Car Guide titled, “Vehicle Equity: Managing the Risk Ahead,” warns that depreciation trends aren’t predicted to slow down anytime soon.

In fact, NADA UCG expects depreciation of vehicles up to 8 years old to jump from an estimated 14 percent in 2015 to an average near 18 percent in 2016 and 2017.

When new-vehicle sales dropped off dramatically during the economic downturn of 2007, used supply took a huge hit, as well.

In fact, the drop-off in new sales and the resulting tight used supply combined to push used prices up by 18 percent since 2007, according to NADA UCG.

But now, the tides have turned with leasing picking up. Lease volume reached 3.2 million units in 2014. This is ramping up used supply growth, NADA UCG pointed out, because these leased vehicles are coming back into the market much quicker than purchased vehicles.

But that’s not all — NADA UCG highlighted two other less-discussed factors that are playing a role in used supply and the consequent pre-owned vehicle depreciation, as well.

NADA UCG explained worsening credit conditions will work against used prices in the near future.

“The Federal Reserve decision to raise short-term interest rates expected in Q3 2015 will push auto loan rates higher for the first time in a decade, although rates will likely rise slowly over an extended period,” the report stated. “Credit conditions will continue to be favorable for some time, but not at quite the same unprecedented level.”

New-vehicle sales growth is also expected to slow, which may cause automakers to ramp up incentives, putting downward pressure on used rates.

“The effort to meet manufacturers’ new sales expectations will result ina level of production unlikely to clear the market without price reductions,” the report said.

NADA UCG expects a combination of more used supply, weaker credit conditions and new-vehicle pricing pressure will combine to create much higher rates of depreciation over the next few years.