After diving by 3.5% on a prior month basis in October, used vehicle depreciation eased up substantially over the first half of November with prices falling by 1.2%, a figure in line with NADA’s full-month target of 1.5% to 1.75% and one dramatically better than October’s mid-month fall of 3.1%.

At the segment level, mid-size van prices have firmed up the most with depreciation improving to 1.6%, up by more than three percentage points from October’s full-month loss of 4.7%. The stabilization in mid-van prices has come despite 2013 model year volume increasing by 32% or 522 units over the first two weeks of the month (relative to the second half of October).


As far as overall auction supply is concerned, volume for units up to 8 model years in age grew by 1% over the same period, with an 8% rise in both 2011 (off-lease) and 2013 (rental fleet) model year volume nearly negating flat or lower volume in other model years. The increase in ‘13MY volume was largely the product of the aforementioned rise in mid-size van supply, along with similar growth in compact car (+323), mid-size car (+622), and mid-size utility (+686) units. Notable volume growth for the ‘11MY was more dispersed across segments, with luxury car and utility supply joining the mix.

Sticking with the latter two segments, mid-month depreciation for luxury cars stood at 1.4%, a large 2.4 point improvement over October’s fall, while the 2.2% drop in luxury utility prices is essentially equal to last month’s 2.4% decline. Prices for the majority of remaining segments – compact and mid-size cars as well as compact and mid-size utilities – have fallen within a tight range of 1.2% to 1.5% month-to-date. Large pickup and SUV segments continue to exhibit above average strength, with prices changing by -0.7% and 0.1%, respectively.

Should price movement continue on the current course, deprecation this November will show similar strength to what was recorded for the month in 2012 when prices were supported by a Hurricane Sandy-induced spike in demand. This would lend credence to NADA’s position that last month’s federal government shutdown artificially nudged consumer demand, and thus prices, lower than they would have been otherwise.

Considering the rebound in consumer confidence that has occurred since the end of the political impasse – Gallup's Economic Confidence Index rose to -24 last week (11/11), up from the -39 figure recorded in mid-October during the shutdown (granted, still below the -15 recorded back in September) – it’s possible that a pop in pent-up demand accumulated during the government's closure could help keep used prices from falling more than they would have otherwise.