GAINESVILLE, GA - The Black Book Three Month Rolling Average market trend report, which tracks the values of two year old (2006 MY) vehicles, indicates that trucks, vans, and SUVs continue to depreciate at higher-than-normal rates.
During the past three-month analysis period, May 1 through July 31, domestic trucks, vans, and SUVs have fallen -14.39 percent, while their imported counterparts dropped -12.41 percent.
Domestic and imported cars continue to fare better, with depreciation rates at a modest -4.18 percent and -4.2 percent respectively. From an absolute dollar perspective, the overall truck market declined almost $2300 per vehicle, while cars depreciated much less, at just over $725 per vehicle.
Ricky Beggs, vice president and managing editor, said, “For the most recent three-month period, these levels of depreciation are slightly greater than the previous three month period that ended on Jun. 30. However, in the last 30 days of the current analysis period, the truck segments depreciated at a much lower rate of -4.86 percent, while the cars fell -1.84 percent. These levels are direct reflections of the market trends that began the first part of the year.”
Beggs added, “Fortunately for the overall market, there are a few full size SUVs and trucks that have had improved auction activity and whose values have increased in the past couple of weeks and are reflected in the most recent published data from Black Book. The recent slight decreases in gas prices, along with correcting some of the extreme over reaction witnessed on the auction lanes since the early spring, are driving the better values.”
Looking at individual vehicle segments for yearly, quarterly and monthly periods, the ones that are continuing to show stronger retention are the smaller, more economical cars. For the past year, the top five best-performing segments include entry-level cars, entry mid-size cars, compact cars, upper mid-size cars, and compact pickups. During the past quarter, four of the five segments that led in the yearly analysis also held the top spots, with the lone exception of sporty cars replacing the compact pickups. For the most recent month, the original leaders for the year achieved top rankings again.
Those segments that are showing the greatest depreciation for yearly, quarterly, and monthly periods include full-size SUVs, full-size pickups, luxury SUVs, mid-size SUVs, and prestige luxury cars, followed closely by full-size vans. Quarterly, the biggest decliners included full-size SUVs, full-size pickups, luxury SUVs, mid-size SUVs, and full-size vans. The most recent monthly results did not include full-size pickups, which were replaced by the minivan segment.
During the past quarter, three vehicle segments, entry level car, compact car, and entry mid-size car, actually went up in value, and one segment, sporty car, depreciated less than $150 per month. On the other extreme, six segments depreciated more than $750 per month during the quarter, including luxury SUVs, full-size pickups, prestige luxury cars, premium sporty cars, and mid-size SUVs.
“Even though some of the segments’ levels of depreciation were greater than ‘normal,’ we have seen pieces of the market showing signs of improvement and stabilization. We feel this is a reflection of the dealers and consumers realizing that prices had dropped to levels of affordability, and that gas prices were not likely to go to $5 or $6 per gallon, at least for the near future,” Beggs said.