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Compact Cars Continue to Show Strength

January 18, 2017

By Eric Gandarilla

LAWRENCEVILLE, Ga. — For the second week in a row, compact cars was one of the segments to experience the lowest depreciation in December, according to Black Book’s Jan. 17 Market Insights report.

For model years 2008-2014, compact cars realized a wholesale value decline of 0.11% — the lowest level among all small cars. Alternatively, prestige luxury cars and subcompact cars realized the highest wholesale-value declines, with depreciation of 0.69% and 0.64%, respectively.

“It is interesting to see that while compact cars did very well in holding value last week, sub-compact cars continued to experience sharp decline,” said Anil Goyal, Black Book's senior vice president of automotive valuation and analytics.

Volume weighted, overall car segment values decreased by 0.41% last week, compared to the average depreciation rate of 0.51% realized in the previous four weeks.

The best-performing truck segments last week were sub-compact crossovers, mid-size crossover/SUVs, and compact vans. These segments saw average wholesale values go up by 0.17%, down by 0.02% and down by 0.16%, respectively. The worst-performing truck segments were full-size vans and full-size luxury crossover/SUVs, which both saw average wholesale values decline by 1.04%.

Volume-weighted, overall truck segment values decreased by 0.37% last week, compared to the 0.47% realized in the previous four weeks.

Looking at the year as a whole, the firm noted that the annual depreciation on used vehicles increased sharply in 2016 due to an increase in supply but a normalization in demand.

“The depreciation rate remained 13% or lower from 2011 through 2013. However, in 2016, it jumped to 17.3%," according to the report. 

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