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Used vehicle depreciation improved considerably over the first half of June compared to the substantial rate recorded in May. Used vehicle prices through the first two weeks of the month have fallen by 2.3% compared to all of May, which is nearly a percentage-point better than last month’s 3.2% decline. While May’s fall was the fourth worst showing for the month since 1995, June’s month-to-date drop is fairly typical for the period.

Even though the degree of change has improved a bit, losses for subcompact, compact and mid-size cars remain among the steepest in the industry. Prices for the group fell by a steep 3.7% in May, and they are down by an additional 2.8% so far this month. The only segment to suffer a more significant decline is luxury mid-size cars where prices are down by a hefty 3.7%.

Compact utility prices have slipped by 2.1% so far in June, which is a percentage-point improvement over the large 3.2% loss experienced in May. Down 2.2%, mid-size utility and mid-size van depreciation is trending a rate similar to last month, while the same can’t be said for large SUVs where losses have accelerated from May’s rate of just 0.4% to nearly 2%. The elevated slide in large SUV prices can be traced to the 2015 Chevy Suburban and Tahoe. The two models are responsible for the lion’s share of 2015 model year volume, and the 2015 share of overall segment volume is high enough to affect results for the entire group. With prices down only 0.5%, large pickups remain the most stalwart of all segments.

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Aside from luxury mid-size cars, losses for other luxury segments have been comparatively mild, with depreciation for remaining car and utility segments checking in at less than 2%.   

Price movement so far in June is in line with our most recent full-month forecast, which places losses for vehicles up to eight years in age in the area of 2 ‒ 2.5%. Our forecast for July has depreciation essentially on par with what is expected in June.