McLean, VA (January 16, 2013) – Used-vehicle prices continued an upward trend in 2012 increasing for the fourth consecutive year, says the NADA Used Car Guide in its latest Guidelines report.
As a result of Hurricane Sandy, the average price of vehicles up to eight years old increased by 0.1% in December compared to November, an improvement from the 2 to 2.5% rate of decline typically expected in the month of December.
December’s strong showing increased used-vehicle prices by 1.2% in 2012, compared to 2011. While not as remarkable as the 7.6% increase in used-vehicle prices in 2011, the past year marked four consecutive years of used-price growth and placed prices 32% higher on average than 2008.
From January through December, the NADA Used Car Guide’s average trade-in values for 2005-2011 model year vehicles depreciated by a historically mild rate of 14.1%. This means that on average, a car or truck with a trade-in value of $15,000 in January’s edition of the Used Car Guide lost $2,114 of its value by the end of the year or less than $200 per month.
“Higher trade-in equity on used vehicles will help encourage the release of pent up demand for a growing number of consumers who need to replace an aging vehicle or who are enticed by the large number of exciting new vehicles arriving at dealer showrooms this year,” said Jonathan Banks, executive automotive analyst for the NADA Used Car Guide.
While the annual loss of value for the market as a whole was relatively mild, depreciation for certain vehicle segments was slow.
Topping this list was the large pickup segment, where higher new-vehicle prices, fuel-efficiency improvements and modest gains in housing and construction increased used demand and held depreciation to 8% over the course of the year, which is about half of the 15% rate of depreciation that is normally expected just from aging. Putting last year’s result into dollar terms, a $25,000 used pickup lost only $183 of its value per month over the course of the year.
“This low rate of depreciation means that consumers should have increased the equity stake in their used pickup – and for used vehicles in general – because they paid off much more in principle over the course of the year than what their truck lost in value,” Banks added.
About the NADA Used Car Guide
Over a 79-year history, the NADA Used Car Guide has earned its reputation as the leading provider of accurate vehicle valuations and auction data. NADA offers a wide range of vehicle values, including those for used passenger car, light-duty and commercial truck, motorcycle, classic car and many more specialty vehicles. Available in a variety of delivery methods, NADA’s products and services are used daily throughout the auto, finance, fleet-lease, government and insurance industries. For more information, visit www.nada.com/b2b.
The NADA Story
The NADA story began in 1917 when 30 auto dealers traveled to the nation’s capital to convince Congress not to impose a luxury tax on the automobile. They successfully argued that the automobile is a necessity of American life, not a luxury. From that experience was born the National Automobile Dealers Association. Today, NADA represents nearly 16,000 new-car and -truck dealers, with 32,500 franchises, both domestic and international. For more information, visit www.nada.org.