Used Vehicle Depreciation Rate Increased in June

NADA Used Car Guide analysis identifies segments taking biggest hits.

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Jul 18, 2016, 01:47 ET

MCLEAN, Va., July 18, 2016 /PRNewswire/ -- Wholesale prices of vehicles up to eight years in age fell by 2.4 percent in June compared to May. The dip met the expectations of analysts at NADA Used Car Guide and is noted in their most recent Guidelines report.

While monthly depreciation was the most recorded in 2016, Jonathan Banks, executive analyst at NADA Used Car Guide said, "This June's performance was only slightly worse than the average 2.2 percent decline for the same period over the previous four years."

Did used vehicle values tank last month? What is ahead on the horizon? Learn the answers to these questions and more in July's used vehicle market update reported by NADA Used Car Guide executive analyst, Jonathan Banks.

As a result, NADA Used Car Guide's seasonally adjusted used vehicle price index remained fairly flat.

"It fell by just 0.2 percent to 119.9," Banks said.

The report points out that June prices of used mainstream cars continued to fall at a rate near record highs:

Subcompact cars depreciated 4.5 percent; the most within the category for the month.
Mid-size and large cars dropped 3.2 percent in value each. The drop falls in line with NADA Used Car Guide analyst expectations.
Compact cars fell 3 percent in June; a half-percentage point more than the previous 2.6 percent four-year average.

June wasn't all doom and gloom, however. After a soft start to the year, mid-size and large pickup prices slipped by a combined average of just 0.6 percent.

On the luxury side of the market, June losses were mixed across the board:

Luxury large cars depreciated 4.7 percent; the highest of all segments.
Luxury large and compact utility segments fell by an average of 2.8 percent.
Losses for remaining luxury segments averaged 1.9 percent.

What Does the Future Hold?
NADA Used Car Guide forecasts prices of vehicles up to eight years in age to fall by 2.5 to 3 percent compared to June.

August and September depreciation is expected to fall between 2.5 to 3.5 percent, with full year price depreciation at about 5 percent on an index basis from 2015.

About NADA Used Car Guide
Since 1933, NADA Used Car Guide^® has earned its reputation as the leading provider of vehicle values. NADA Used Car Guide^® and its logo are registered trademarks of National Automobile Dealers Association, used under license by J.D. Power and Associates.

Media Inquiries: Ryan Morris, Public Relations, NADA Used Car Guide^®, a division of J.D. Power and Associates | 1-703-821-7165 | [email protected]

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SOURCE NADA Used Car Guide