NADA Used Vehicles Prices Decline in May

June 16, 2016
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May depreciation accelerated as wholesale prices of used vehicles newer than eight years old fell by 2% when compared to April, but the numbers showed improvement over the 2.7% average decline captured in the month of May the last four years.

The performance resulted in 0.7% price index increase, the used guide’s first index increase since November 2015, according to NADA’s June Used Car Guide Analysts.

The prices of used mainstream cars continued to fall at industry-high rates, and compact car depreciation was the segment loss leader, reaching 3% on the index, according to the report.

Mainstream compact utility prices fell at an above average rate of 2.5% due to pressure from a growing pool of supply and higher new vehicle incentives. Mid-size and large pickup prices showed familiar numbers over the past two months by garnering a combined average of 0.4%.

"Our June forecast has prices of vehicles up to eight years in age falling by 2.5 to 3 percent compared to May. The drop is similar to the 2.5 percent decline we saw during the same period in 2014 and '15. We expect depreciation in July and August to fall between 2.5 to 3 percent,” said Jonathan Banks, executive analyst at NADA Used Car Guide.

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