Depreciation remains at some of the lowest levels seen all year, driven in part by the strength of entry level cars, according to Black Book’s April 10 Market Insights report.
“Entry level cars show seasonal strength in value, driven by demand from tax season buyers, while the luxury segments show some weakness. Pickups are also seeing renewed improvement in values,” said Anil Goyal, senior vice president of automotive valuation and analytics.
Last week, the car and truck segments showed that two different sides of the vehicle spectrum performing can perform equally as well during the same week. In the car segment, compact cars were the best-performing vehicles, while the truck segment saw full-size pickups as its segment leader.
Volume-weighted, overall car segment values increased by 0.15% last week, compared to the 0.09% increase in the previous week. Compact cars, sub-compact cars, and sporty cars were the best performing vehicles, increasing 0.41%, 0.25%, and 0.26% in value, respectively. Prestige luxury cars had the worst performance last week, falling 0.45% in value.
For the overall truck segment, average wholesale values decreased by 0.04% last week, essentially flat with the 0.02% depreciation in the previous week. The segment leaders were full-size pickups, small pickups, and minivans, which respectively increased 0.43%, 0.28%, and 0.16% in value, compared to the week before.
Looking at depreciation during the first three weeks of spring compared to a year ago, vehicle values are considerably stronger, according to Black Book data. Last year, the first three weeks of spring saw a depreciation rate of 0.36% for cars; this year, car values are up 0.45%.
The depreciation rate for the overall truck segment during the first three weeks of spring in 2016 was 0.82%; this year, the average depreciation through the first three weeks of spring for the truck segment is 0.18%.