GAINESVILLE, Ga. New models and strong new car sales are cutting into used car values, reports Black Book.
The arrival of 2014 models will have the greatest impact on the prices of late model used cards, explained Ricky Beggs, SVP and editorial director at Black Book. But what could have a bigger impact on overall used values are mounting trade-ins from new car sales that have been steadily rising. “Sixty percent of all new vehicle sales involve a trade-in and many of these will be an older model.”
Beggs noted that despite the additional trades that 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 12 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.”
Beggs cautioned that additional off-lease supply, another form of a trade, also is coming back into the market in greater numbers, contributing even more toward the decline in prices.
