Vehicle Depreciation Rates Expected to Hit 15%

Over the past four years vehicle depreciation rates have remained below 14% for two- to six-year old vehicles, but that is anticipated to change for 2016. In 2016, depreciation rates are expected to climb to 15%. Further analysis of the market shows how cars, SUVs, and trucks fared in 2015. 

Given gasoline price forecasts from the U.S. Energy Information Administration (EIA), in 2016, gasoline price per gallon are expected to remain below $2.20, according to a report from Black Book and Fitch Ratings. 

Pressure on residual performance will trend higher in 2016 because of predicted highs in new vehicles sales and higher fleet and rental volumes entering the secondary market during the year. 

In 2015, the market was driven by low gasoline prices, favorable credit availabilty, and continued growth the report goes on to say. Further analysis of depreciation trends ranging from cars to trucks show that used vehicle depreciation rates were better in the truck segment. Overall, the truck segment experienced half the depreciation rate of the car segments. Annual depreciation of trucks and cars that were two- to six-years old were 9.2%  for trucks and 18.2% for cars. 

The strong truck segments' performance is expected to continue, according to the researchers.