Though used prices are still falling from the abnormally high rates seen during 2008 and 2009, it seems used-vehicle depreciation is slowing as the summer progresses.

After sliding by a slight 1.1 percent in June, depreciation “tightened” up even more in July, said NADA Used Car Guide’s Jonathan Banks. According to the latest NADA Guidelines report, prices for vehicles up to 8 model years old fell by only 1 percent in July.

Banks stressed that these rates are significantly lower than the 2.6 percent loss seen during July 2012 and July 2011’s drop of 1.6 percent.

“Depreciation as a whole has remained very mild over the course of the past two months,” Banks said.  

At a segment level, even as gas prices ticked towards $4 per gallon at the pump, wholesale prices remained especially strong for large pickups, large SUVs and midsize utilities, “with each outperforming their respective car segments,” Banks said .

And trucks, pickups in particular, experienced strong prices for most of the spring and early summer, as well.

After climbing by 2 percent in June, large pickup prices came in flat in July, a much stronger performance than some of their smaller counterparts.

The compact cars experienced the largest price drop in July, sliding by 1.7 percent, which matches June’s decline for this segment, as well.

The luxury car segment also saw a large decrease this past month, with prices falling by 1.7 percent — more than half a percent higher than June’s depreciation rate.

Mid-ize van declines grew by a similar amount to land at 1.6 percent.  

Wrapping up the segment statistics, compact utility prices fell by 1.1 percent for the second month in a row, while midsize car prices fell by a similar rate of 1.2 percent, and luxury utility depreciation “quickened” a bit to 1.4 percent, up from June’s figure of 0.8 percent, Banks reported

Similar to Last Year’s Figures

Banks also covered the year-to-date wholesale price figures, explaining that the environment is very similar to what the industry experienced last summer.

“Through the first seven months of 2013, vehicles up to 8 years in age carried an average price of $15,638, a figure nearly identical to 2012’s average of $15,620 and a little over $500 higher than 2011’s average of $15,131,” Banks said.

Although overall average prices mirror 2012 rates, segment changes showed quite a different story during the first half of this year.

The combined large pickup and large SUV year-to-date climb in prices rose to 8 percent from 2012 rates. Midsize van prices also grew by about a half a percent to put their year-to-date rise at 2.8 percent, followed by mid-size utilities at 1.7 percent increase.

As for declines, Banks reported the luxury car and luxury utility prices have seen the biggest drops over the course of 2013, with respective slides of 1.6 percent and 1.5 percent so far this year.

The compact utility segment has seen a small 1.3 percent drop followed by the mid-size car and compact car segments at 1.1 percent and 0.6 percent, respectively.

“Overall, average market prices have appreciated by 0.1 percent so far in 2013, due largely to large pickup and large SUV strength,” Banks said.

But what can we expect for the rest of the year?

Edmunds.com reported this week that the industry can expect a “typical” seasonal used price pattern this year: “increase in spring, stabilize through early summer months, then decrease thereafter.”

Edmunds also shared that the midsize car segment may drop more than the average in the coming months, due to increasing levels of available inventory.

For this segment, “values could drop significantly because of the off-lease volume that is still coming in as well as possible increased incentives from the OEMs,” the company said.

“Midsize segment constitutes the most significant volume of lease returns which will contribute to the segment having the highest market share.”
 

Sarah Rubenoff can be reached at srubenoff@autoremarketing.com. Continue the conversation with Auto Remarketing on both LinkedIn and Twitter.