2017 Black Book Used Car Depreciation Forecast

LEARN MORE: The Auto Channel Used Car Super Search

LAWRENCEVILLE, Ga. February 27, 2017; Black Book on Monday released its latest joint depreciation report with Fitch Ratings; an analysis that projected 2017 vehicle depreciation to reach 17.8 percent based on estimated new-model sales of 17.0 million.

That forecast is slightly up from the 17.3-percent mark recorded in 2016.

The firms point out that average pre-recession annual depreciation trended between 16 percent and 18 percent.

Between 2011 and 2015, Black Book recounted that average annual depreciation fell between 8.3 percent and 13.2 percent, driven mostly by high demand for used vehicles followed by low supply levels of in-demand segments such as trucks, crossovers and sport utility vehicles. Editors contend much of the pent-up demand fueling both new- and used-vehicle sales has been spent, resulting in a rising level of vehicle depreciation expected in 2017.

What’s more, a continued increase in lease activity along with higher incentives that began in 2016 spell more pressure on residual values, which are also expected to continue falling in 2017, according to the report.