Used vehicle depreciation for units up to eight years in age dropped by 0.7% over the first half of December, which is a trajectory in line with NADA’s full-month forecast of 1.5%. Should the month finish as expected, used vehicle prices will end the year 0.5% higher than 2012’s record high level; in addition, depreciation would be on par with what has been recorded for December over the past few years (excluding 2012’s abnormally strong result stemming from Hurricane Sandy).
Across segments, depreciation has largely fallen within a tight range of 0.2% to 0.7%, with compact utilities and mid-size cars at the low end and luxury utilities at the high end. Segments falling outside of this range include large SUVs and luxury cars where prices have fallen by 1.5% and 1.2%, respectively, so far this month.
As far as auction volume was concerned, the number of units up to eight years in age was 6% lower over the first half of December that it was in the last two non-holiday weeks in November. Volume was also 5% lower on a prior-year basis, although four- and five-year-old supply (which covers the 2010 and 2011 model years for calendar year 2013) was up by 34% and 19%, respectively. On a year-to-date basis, overall auction supply remains down by 1%.