Though depreciation had slowed a bit at the start of the year, wholesale depreciation is now continuing at a steady pace, and the industry isn’t seeing much of the usual tax season strength. This is true especially for some of the smaller car segments, which are seeing significant price drops.
According to the latest Black Book Market Insights report, the car segments dropped by an average of 0.53 percent or $53, while trucks dropped by 0.42 percent or $62 last week.
Commenting on the market’s performance in an analysis, Anil Goyal, vice president of automotive valuation and analytics at Black Book, said, “The used-vehicle market continued to decline at a steady pace, not showing signs of any tax refund season strength yet.”
Auction attendees echoed that sentiment in the lanes. Black Book editors overheard an auction attendee from Pennsylvania say, “The market seems a little off today. Bidding and sales were just a bit sluggish,” while another buyer from Tennessee said, “Large SUV sales were slow this week in this location.”
And Black Book pointed out, “Average weekly depreciation rates are higher in 2016 in comparison to 2015 for the month of February across all primary car segments that get attention during the tax refund season.” This includes the full-size, compact, midsize and subcompact car segments.
The car segments’ decline last week was higher than the average depreciation rate of 0.38 percent seen over the previous two months.
Among the cars, the subcompact and compact categories took the biggest hits last week. The subcompact segment dropped by 1.06 percent or $62, while the compact cars fell by 1.07 percent or $75. The best performing car segments were the midsize and sporty cars, which both fell by just 0.14 percent, on average.
Truck depreciation has picked up, as well, after staying relatively mild throughout much of 2015. In fact, last week’s price drop is slightly higher than the average depreciation rate of 0.39 percent seen over the prior eight weeks.
That said, a couple of truck segments actually saw prices rise last week. The full-size crossover/SUV segment rose by 0.08 percent or $14 last week, while the full-size vans saw a slight rise of 0.06 percent or $8.
On the other hand, the small pickup and compact luxury crossover/SUV segments dropped the most out of the trucks, with declines of 1.19 percent and 0.82 percent, respectively.