Value Proposition
Image caption: 2016 Dodge Ram 1500
Admit it: That slick BMW 7-Series for sale, visible from the main route to and from work, was just a bit too expensive even though it was a year old. But take a look at one now: the luxury brand fits in a group of cars showing a 25 percent drop in price in the past year.
By contrast, a truck buyer fortunate enough to snag a Ram 1500 model in 2016 has lost less than 5 percent of its value in a year from $25,434 for its "full-sized pickup" segment to $24,200 now.
These cases illustrate the price movements that can take place as vehicles depreciate, or lose value, over time.
Reports such as Black Book based in Lawrenceville, Georgia, track the typical prices of pre-owned cars and trucks as a whole while also breaking out various segments such as sports cars and hundreds of individual models.
According to the researcher's latest report on Nov. 14, the prices of used vehicle in 2012-16 model years are averaging a 12-month depreciation calculated at -13.2 percent, the company said. The sagging value works out to a $2,640 decline in price on a $20,000 auto or truck. The price of all 1,415 types of used vehicles sank to $14,866 from $17,120.
Black Book disclosed that values were -1.4 percent in October. Cars are -1.8 percent and trucks, -1.1 percent.
The fall month was somewhat unusual, what with hurricanes Harvey and Irma impacting auto prices and values.
"With the hurricane damage replacements continuing, we saw (a) better than usual October depreciation rate," said Anil Goyal, senior vice president of Automotive Valuation and Analytics for Black Book. "However, with most of the replacement activity behind us, we will start to see seasonal depreciation patterns (as) we end the final quarter of the year," he says.
By classification, full-sized pickups posted the strongest value retention, at -0.1 percent. The class includes three 1500 series, the Ram, Chevrolet Silverado, and GMC Sierra, and the Ford F-150. The average segment price at the end of October was $24,244. Full-sized pickups are -4.7 percent in price for the year.
In the month, "premium sporty cars" took the biggest lumps in value at -2.6 percent. The category takes in the BMW 6-series, Chevrolet Corvette, Porsche 911, Jaguar F-Type, Mercedes-Benz SL-Class and the Lexus RC350. The segment entered November with an average price of $39,102, -17.5 percent from $47,404 a year ago.
Meanwhile, "prestige luxury cars" reported the highest depreciation in the past 12 months at -25 percent. The models on average are valued at $32,213 compared with $42,966 a year ago. Along with the BMW 7-Series, vehicles in the group include the Lexus LS 460, Porsche Panamera, Jaguar XJ, Mercedes Benz S-Class and Audi A8.
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