Beggs Explains Reasons Behind Drop in Compact Crossover Used Values Amid Hearty Demand
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Consumer appetite for the latest iterations of the compact crossovers is strong, Black Book says, thanks to the functionality, value and fuel economy these vehicles offer. And shoppers are even responding positively to the fact that these vehicles are bigger than their 2005-2008 counterparts.
However, this strength doesn’t appear to have translated over to the value retention side for later-model units of these compact crossovers on the used-car side of the market.
Black Book’s Ricky Beggs had the answer as to why this may be happening, and the reasons behind this decline might not necessarily be all that bad.
First, the statistics.
Black Book indicated that values of model-year 2008-2012 compact crossovers fell 2.4 percent last month, more than any other car or truck segment tracked by the company. And consider this: their values fell only 0.5 percent just a few months back (in February).
These numbers hammer home Black Book’s assertion that compact crossovers are “struggling with retention after stable depreciation earlier this year.”
So, why the drop?
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“Compact crossovers are extremely popular vehicles and we’re starting to see the effects of much more used supply coming back into the market, driving used prices down further,” said Beggs.
“Adding to this perfect storm is the fact that this segment had much stronger retention earlier this year, making it susceptible to an overall correction that we’re now seeing.”
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