Used Car Prices Expected to Fall
If you’re in the market for a used car, this year might be a good one to buy.
According to the latest joint vehicle depreciation report from Black Book and Fitch Ratings Inc., used car prices are expected to drop in 2015 at an accelerated rate due to increased supply and larger off-lease volumes. The report states that 16.5-million new vehicles were sold last year and Black Book forecasts that new car sales will reach over 16.7-million vehicles this year. In addition, the annual depreciation rate on used vehicles last year was reportedly 12.1 percent but is expected to rise to 14.5 percent this year.
SEE ALSO: How to Test Drive a Used Car
The study also notes that used car inventories and lease returns are expected to grow 10 percent this year. Naturally, as more used cars hit the market, prices will fall. The depreciation report uses Black Book’s used vehicle depreciation data combined with Fitch’s U.S. auto ABS indices data.
“2014 depreciation was defined by pockets of volatility due to seasonality, harsh weather patterns and falling fuel prices impacting smaller cars and trucks of all sizes,” said Anil Goyal, Vice President of Analytics and Strategic Partnerships for Black Book. “Looking ahead, lower consumer demand and CAFÉ-driven model competition will place higher depreciation pressure on smaller car segments particularly, but trucks should have stable retention in 2015 due to balanced production levels and strong housing and service economies.”
Jason Siu began his career in automotive journalism in 2003 with Modified Magazine, a property previously held by VerticalScope. As the West Coast Editor, he played a pivotal role while also extending his expertise to Modified Luxury & Exotics and Modified Mustangs. Beyond his editorial work, Jason authored two notable Cartech books. His tenure at AutoGuide.com saw him immersed in the daily news cycle, yet his passion for hands-on evaluation led him to focus on testing and product reviews, offering well-rounded recommendations to AutoGuide readers. Currently, as the Content Director for VerticalScope, Jason spearheads the content strategy for an array of online publications, a role that has him at the helm of ensuring quality and consistency across the board.
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Are they supposed to be low now? Because this hasn't happened yet.
I don't think so. I think the opposite will happen. As the new cars are getting more expensive every year, the used cars market will stay the same or even will be higher in the next coming months in my opinion. Cheers!