MCLEAN, Va. — Auction prices for full-size pickup trucks were up nearly 7 percent through the first four months of 2013, according to the NADA Used Car Guide’s May edition of Guidelines.
A key factor contributing to the higher values for used, full-size pickups, which have increased in price by 28 percent from 2007 to 2012, is the basic rule of supply and demand. The supply of full-size pickups up to eight years old declined by 17 percent from 2007 to 2012, and will fall by an additional 8 percent on an annual basis in 2013, the NADA predicts.
“The continued slide in supply comes at a time when demand is heating up and the housing market improves,” said Jonathan Banks, executive automotive analyst with the NADA Used Car Guide.
“The recovery of home values and increased residential construction, stabilizing gasoline prices and a decline in late-model supply have resulted in higher trade-in values for full-size pickups,” he added.
New housing starts totaled 781,000 in 2012, and the National Association of Home Builders estimates that housing starts will jump to at least 1 million units in 2013. Prices are also on the rise, up 8.7 percent over the first two months of 2013 compared to the same period a year ago, according to the S&P/Case-Shiller 20-City Composite Home Price Index.
“The increase in home prices will continue to stoke demand for full-size pickups, particularly those in configurations most frequently used in construction applications, such as lower-priced 2-wheel drive, regular cab trucks with V-6 engines,” Banks added.
The NADA reports that wholesale prices for all segments of used vehicles up to 8 years old dropped by 1.7 percent in April. Compact and mid-size cars led the decline with prices falling by a combined average of 2.1 percent. Used prices for full-size pickups slipped by a modest 0.5 percent in April.
“The low rate of depreciation for full-size pickups means that consumers will find themselves in a favorable equity position if they trade-in their used pickups for a new or newer pre-owned one,” Banks said. “There is little evidence to suggest that consumer demand for full-size pickups will diminish in the near-term. We expect prices in the segment to remain above average for the remainder of the year.”