'Typical' Annual Depreciation Reaches 12%: Black Book

Photo by Eric Gandarilla. 

The average 12-month depreciation through the end of November for vehicles from model years 2013-2017 was 12.5%, according to Black Book.

Average car segment depreciation was lower than truck segment depreciation this year, thanks in large part to the strong retention the car segment exhibited through the early and middle part of the year. Car values beat expectations in 2018. 

Part of the car segment's success this year was due to the used market shifting in favor of truck segments, meaning there were fewer car units available, resulting in a larger price for the ones that were available. Another aspect was the low price that these cars had fallen to from previous years of high depreciation, which placed them in a spot where they presented an excellent value for buyers. 

Black Book has noted that it expects cars to hold their values well as truck segment demand continues to grow. 

Twelve-month depreciation for the car segment through November stood at 12.2% while truck depreciation through the same period stood at 12.7%. 

Domestic models, on average held their values much better than their imported counterparts. Twelve-month domestic car depreciation was 9.9% while imported car depreciation was 13.2%. Imported and domestic truck values were fairly similar at 13% and 12.7%. 

Taking a look at November, vehicle values fell an average of 2.5%. Car values fell 2.7% through the month while truck values fell 2.3%, for an average of 2.5% for all vehicles.

Truck segments, on average, posted lower depreciation than cars in the month. The three vehicle segments with the lowest depreciation in the month were subcompact luxury CUVs, subcompact CUVs, and full-size vans, which saw 0.8%, 0.9%, and 0.9% depreciation, respectively.

The heaviest depreciation in the month came from minivans, full-size crossovers/SUVs, and compact cars, which all saw their respective values fall by 3.3%.

“Entering the final month of the year, we’re seeing typical depreciation trends across many of the segments listed, with most of the heavier depreciation affecting car segments this deep in the year,” said Anil Goyal, executive vice president, operations at Black Book. “Car segments for much of the year held very strong from healthy demand, but this momentum has stalled out in the final quarter of 2018.

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