GAINESVILLE, Ga.-With used car values still at record highs and managing risk at the CU a growing concern, Black Book and Fitch Ratings have assembled a report to help lenders closely monitor vehicle depreciation.
The Black Book-Fitch Vehicle Depreciation Report was recently released and will be available to lenders quarterly. Jeff Bunch VP of lender solutions for Black Book, said lenders have expressed a great deal of interest in being able to monitor used values, especially at a time when used values are expected to begin declining at a faster pace than they have in the last several years.
"In 2012 the vehicle depreciation rate average was 13%," said Bunch. "Historically the rate is at 15% to 18%."
Black Book expects the depreciation rate to increase steadily each month to end in the 15% range by December. "It won't be a nosedive in values, but a gradual drop as more used cars come into the market from consumers trading them in for a new vehicle."
Bunch added that the report not only can help lenders avoid a risky car loan, it can help spot opportunities. "For example, if the credit union has been making a lot of loans for a vehicle that is shown to hold its value well, it could begin extending a greater loan amount for that car."
