With the arrival of 2014 models, Black Book expects prices of late-model vehicles will feel the most impact, meaning car dealers, remarketers and shoppers can expect lower prices on 2011-12-2013 year models.
As new-vehicle sales continue to rise, more car shoppers will bring older vehicles as a trade. Black Book says approximately 60% of all new-vehicle sales involves a trade-in and many of these will be an older model.
Combined with the new model year arrival, more trade-in activity results in additional used-vehicle supply, forcing prices even lower.
Despite this increased activity, prices on used vehicles have softened just slightly from their highs of a few years ago. Pre-recession annual depreciation on a vehicle is between 15-18%, and some vehicle models such as compact pickups and compact SUVs have depreciated just 4.2% and 4%, respectively, during the last twelve months.
“The used car market is still noticeably strong considering how much additional inventory has been brought back into the market through trades during the last few years,” said Ricky Beggs, Senior Vice President and Editorial Director at Black Book. “What’s more, additional off-lease supply, another form of a trade, is also coming back into the market in greater numbers, contributing even more toward the decline in prices.”
About Black Book
In business since 1955, Black Book is a provider of accurate pricing insight, mobile solutions and online vehicle trade-in valuation for the automotive industry. The company offers the industry’s most accurate vehicle valuation insight to dealers, lenders, remarketers and government agencies. Black Book also provides automotive shoppers with instant and accurate credit-score estimates and trade-in appraisals, which provide the highest quality sales leads for dealers. Click here to view Ricky Beggs’ weekly video series offering the latest insight in the auto market http://ow.ly/aHFD6. Follow Ricky on Twitter @BeggsBlackBook (https://twitter.com/beggsblackbook) and on Facebook http://www.facebook.com/blackbookUSA.