Vehicle Depreciation Accelerates Heading Into Q4
LAWRENCEVILLE, Ga. — A steep decline in wholesale values for what has been a strong segment may point to more than seasonality as the reason for higher depreciation recorded for two-year-old vehicles last week, Black Book said this week.
This week’s Black Book Market Insights report show a greater weakening in pricing on vehicles in both car and truck segments heading into the fourth quarter, which is typical this time of year. What caught the firm’s eye, however, was that most crossover/SUV segments showed the highest value declines last week, with the full-size crossover/SUV segment leading the way with a 1.12% drop.
“Typical seasonality trend of the higher depreciation in the fourth quarter continue,” noted Anil Goyal, senior vice president of automotive valuation and analytics for Black Book. “Crossover/SUV values, which have been strong all year, are also starting to see steeper declines.”
Volume weighted, overall car segment values decreased 0.80%, which was higher than the depreciation rate of 0.69% seen in the previous four weeks. Leading the way were the mid-size and sporty car segments, which decline by 1.20% and 0.88%, respectively, last week.
The overall truck segment values, including pickup, SUVs, and vans, decreased by 0.76%, which was higher than the depreciation rate of 0.57% seen in the previous four weeks.
Past seasonality trends, according to Black Book, show that vehicle depreciation is typically highest in the fourth quarter. This year is looking to be no different, except that retention values are lower this year than what was recorded the previous four years.
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