NADA's Used Vehicle Price Index Reaches All-Time High in November
Used vehicle prices firm up in November after taking a dive in October
MCLEAN, VA--Dec. 16, 2013: After diving by 3.5% in October, the rate of used vehicle depreciation slowed substantially to 1.5% in November, pushing the NADA seasonally adjusted used vehicle price index to its highest point of 125.6.
The index, which measures the change in prices for used vehicles up to eight-years-old, is up 1.8 points from October's figure of 123.8, surpassing the previous high of 125 set in December 2012.
"November's decline in the rate of depreciation can be credited to favorable market conditions, lower unemployment, moderating gas prices and advantageous credit conditions, including the end of the federal government shutdown in October," said Jonathan Banks, executive automotive analyst of the NADA Used Car Guide, in the December edition of Guidelines, a monthly report on new and used vehicle sales trends and price movement.
At the segment level, mid-size van prices firmed up the most in November with depreciation improving to 1.6%, up by more than three percentage points from October's steep loss of 4.7%.
Compact and mid-size car prices fell by an average of 1.4%, more than two points less than October's tumble. Compact and mid-size utility prices also fell by a combined average of 1.4%, while the large pickup and SUV segments continued to exhibit above average strength with prices dipping by just 0.8% apiece.
Luxury car depreciation moderated by nearly two points in November, but the segment's 1.9% drop was still roughly a half-point more than the overall market average. Luxury utility prices suffered a more severe 2.5% fall that basically matched the 2.4% drop recorded in each of the prior two months.
November's results did little to change annual differences in prices. Overall market prices remained up by 0.5% compared to the same period last year, while compact utilities, large pickups, large SUVs and mid-size vans all saw their price advantage over 2012 tick up by a tenth of a point. Differences for remaining segments ranged from 0.5% (compact cars) to 1.5% (luxury cars) lower than levels at the same last year.
Barring an unexpected severe drop, used vehicle prices should close out 2013 slightly higher than 2012's record high average of $15,042; this would mark the fifth year in a row of growth.
Looking ahead to the first quarter of 2014, NADA expects to see a familiar seasonal bounce with used vehicle prices rising by about 2% from January through March. On a seasonally adjusted basis, prices would essentially be equal to where they were in the first quarter of 2013, but nearly 1% lower than the fourth quarter of 2013.