Elevated gasoline prices continued to have a minimal impact on used vehicle prices through the first half of September as compact and mid-size car prices declined more than their larger truck counterparts.
Market level depreciation through over the first half of the month checked in at just 1.5% and overall prices continue to be abnormally resilient considering the steeper rates of loss normally witnessed over the period. Historically the rate of value loss picks up through the fall, but so far that has not been the case. By comparison, depreciation in July and August reached 2.0% and 1.9%, respectively.
The mid-size van segment proved to be a bit of an outlier as it led other segments in terms of depreciation as so far this month prices for the segment have fallen by a substantial 3.2%.
What’s causing the recent dip in mid-size van values? Looking at recent sales data shows the primary culprit behind the steep decline to be an increased number of 2012 model year fleet units of the Chrysler Town & Country and Dodge Grand Caravan in the auction lanes.
Auction volume for the Town & Country and Grand Caravan grew by 56% and 28%, respectively, on a monthly basis. Historically speaking, early fall is usually the time of the year that many rental companies dispose of units that are no longer necessary because the summer rental rush has come and passed and rental companies trim their fleet portfolios as a result.
What does this mean for mid-size van segment prices moving forward? Expect to see prices continue to soften over the next few weeks as volume works its way through the lanes, but prices should firm up again as we move deeper into the fall.
Across other segments, compact and mid-size car deprecation again exceeded most other segments save mid-size vans and September’s 2.2% and 2.0% respective rate of decline was a bit more than the combined 1.7% average observed in August.
The large pickup segment continued to buck historical trends as gasoline prices remained high. The 0.7% monthly decline in average prices was again the lowest of all other segments.
As a collective, prices for utilities of all sizes (compact to large) and large pickups slipped more than last month, but the collective fall of 1.4% was markedly lower than historical norms for the season.
Looking at luxury segments, both car and utility prices fell by 1.1% and 1.3%, respectively, which was slightly less than last month for each segment.