After dropping by 3.5 percent in September, October used-vehicle prices held up a bit better, but depreciation has picked up again this month.

According to the latest Guidelines report from NADA Used Car Guide, used-vehicle prices fell by 2.8 percent in October.

Jonathan Banks, executive automotive analyst at NADA Used Car Guide, pointed out this October’s showing was also the best performance for the month in three years; prices in both 2013 and 2014 dropped by 3.6 percent during the same month.

“In dollar terms, the 0.8-percentage point difference translates into a nearly $175 improvement in monthly depreciation for a $20,000 vehicle,” Banks explained in the report.

Last month’s trends caused NADA Used Car Guide’s seasonally adjusted vehicle price index to move up 0.4 percent to 122.5. This reading is more than a point higher than the 121.3 figure seen in October 2014.

Segment trends fell in line with seasonality last month. Banks reported, “as is usually the case for October,” compact, midsize and large cars, as well as mid-size vans, took the biggest price hits.

• Compact car prices dropped by almost 4 percent.
• Midsize van and large car prices each dropped by 3.4 percent.
• Midsize car prices declined by 2.9 percent.

“It’s worth noting that while the group’s losses were top-of-industry, October’s declines were measurably better than what occurred in both September and over the past few years,” Banks said.

For example, after five consecutive months of price drops of more than 4 percent, subcompact cars only took a hit of 2.3 percent last month.

For trucks, once again, “depreciation was again generally superior to that of cars,” said Banks.

Price movement highlights among trucks last month include:

• Large pickups depreciated by 2 percent in October, after dropping by 2.8 percent in September.
• Midsize pickups declined by 1.3 percent.
• Compact utilities saw a drop of 2.6 percent.
• Midsize and large utility prices dropped by 2.3 percent and 1.9 percent, respectively.

Though prices have held strong for pickups for most of the year, the tides have turned a bit in November. During the first week of November, truck prices took the biggest hit seen this year — and last week, prices took another hefty plunge.

According to the latest Black Book Market Insights report, trucks experienced one of the largest price declines this year in the lanes last week, with prices falling by approximately 0.80 or $125.

Going back to Guidelines and taking a quick look at luxury segment movement last month, luxury compact and mid-size utility depreciation led the group, with rates dropping by almost 3 percent and 2.4 percent, respectively.

“The month was among the worst for the two segments over the past two years,” Banks said in the report.

Luxury cars bucked recent trends and performed better than the utility segments; luxury compact car and mid-size prices dropped by a combined average of 2 percent. Luxury large car prices only saw a slight 0.6-percent decline.

Year-to-date trends

According to NADA, overall depreciation for the year comes in at 12.3 percent, which is a bit stronger of a drop than 2014’s 11-percent decline through October.

Here is a year-to-date segment breakdown:

• Subcompact car prices have dropped by 17 percent.
• Luxury large cars lead the pack in terms of depreciation with a decline of 18 percent.
• Compact car, midsize car and large-car prices have dropped by an average of 14 percent.
• Midsize van prices have fallen by 13 percent.
• Large utility, mid-size utility and compact utility declines range from 8 percent to 10 percent.
• Midsize and large pickup prices have dropped by just 4.5 percent.

The rest of the year

For this month, NADA UCG expects used vehicle prices up to 8 years old to fall by 2 to 2.5 percent compared to October.

Banks noted that those this month’s forecast is worse than 2014’s 1-percent drop in November, it is in line with the nearly 2-percent declines seen from 2011 to 2013 for the month.

“Prices of non-luxury cars and mid-size vans are scheduled to drop by approximately 2.5 percent, while mainstream utility and truck losses are expected to average roughly 2 percent,” said Banks. “Luxury car and utility losses are projected to be in the range of 2.5 percent to near 3 percent.

Depreciation should improve in December, NADA UCG reported, with expected declines of 1.5 percent to 2 percent.

“If the market performs as expected, prices on an indexed, full-year basis would be 0.6 percent lower than 2014’s record-high average,” Banks concluded.