Resale Market Updates
According to a new report from Black Book, depreciation per vehicle, per month has been on an upward shift. October depreciation rates went from 2.3% to 2.9% in one month.
However, compact cars continue to lose value compared to the overall market. They are reportedly at a 3.6% rate, returning an almost 20% lower value than same time last year. This rate affects popular models such as the Nissan Sentra, Chevrolet Cruze, Ford Focus, and the Hyundai Elantra.
Common fleet options such as full size pickups (2.2%/month) and full size cargo vans (2.3%/month) are also seeing smaller returns and are respectively faced with year-over- year declines of 4.6% and 5.9%.
The Environmental Protection Agency (EPA) released its midterm review on November 30, 2016, stating it will retain the Corporate Average Fuel Economy (CAFE) targets that have been planned for 2022-2025.
Automaker lobby groups declare that the new regulations will add an average of $1,800 to the cost of every new car sold in North America.
Meanwhile, 32% of passenger cars that have been traded in at dealerships across the U.S. are worth less than the remaining balance owed by the owner. The number of buyers who are “upside down” in regards to their trade-ins has reached a record level high in 2016.
According to Experian Automotive, the extended terms of consumer automotive loans is contributing to the issue. The average new loan is 68 months, for approximately $29,880. Not to mention, low fuel prices have significantly increased the demand for crossover utility vehicles and pick-up trucks.
For more information about the current state of car loans and trade-in trends, visit: