The passenger car segment was a main contributor to the the rise in used-vehicle prices in 2018, according to J.D. Power's December Used Car and Truck Guidelines.
Vehicles such as small cars and midsize cars, which had seen falling prices in years past, saw a resurgence in demand in 2018. Stronger demand led to lower depreciation through most of the year, which led to higher wholesale prices, which helped lift the overall used market.
Final numbers have not been tabulated for full-year 2018, but J.D. Power expects compact car prices to end the year around 9% over where they were at the same time in 2017. Similarly, J.D. Power expects prices for the midsize car segment to grow around 7% once full-year numbers have been reported.
SUV prices, which have been strong for most of 2018 and 2017, are expected to increase in 2018, but not by as much as certain vehicles in the car segment.
“There are a few reasons for this; one of the primary drivers is the increase in used supply of these segments along with affordability, which favors more competitively priced passenger cars,” noted the J.D. Power report. “With that said, compact utility prices are expected to end the year nearly 2% above 2017’s level while mid-size utility prices are expected to increase by nearly 5%.”
The luxury segment continued to struggle through most of 2018. The forecast for the segment, once final numbers for December have been included, is for most premium segments to be down.
One segment, the luxury midsize car segment, is expected to see prices fall by more than 7%, J.D. Power noted.
Looking back at 2018, J.D. Power found that wholesale used vehicles up to 8 years in age fell 3.5% in November, marking the third consecutive month of declines, according to its most recent Used Car and Light Truck Guidelines.
Strong price gains seen through the rest of 2018 offset this three-month decline, however. Despite this three-month decline, J.D. Power Valuation Services’ Seasonally Adjusted Used Vehicle Price Index remained at its highest level since early 2016.
Overall used vehicle prices at the start of December were up 2.8%, on a year-over-year basis, according to J.D. Power’s most recent data.