Vehicle Depreciation to Accelerate in 2015

February 04, 2015

Photo via Wikipedia.
Photo via Wikipedia.

Vehicle depreciation rates are expected to keep climbing in 2015, according to a new report from Black Book and Fitch Ratings Inc.

Black Book forecasts new vehicle sales to finish a little above 16.7 million units this year.

Last year the depreciation rate on used vehicles was 12.1 percent, which was lower than the initial forecast. For 2015, depreciation levels are expected to hit 14.5 percent, according to the report.

"2014 depreciation was defined by pockets of volatility due to seasonality, harsh weather patterns and falling fuel prices impacting smaller cars and trucks of all sizes," said Anil Goyal, Black Book's vice president of analytics and strategic partnerships. "Looking ahead, lower consumer demand and CAFE-driven model competition will place higher depreciation pressure on smaller car segments particularly, but trucks should have stable retention in 2015 due to balanced production levels and strong housing and service economies."

Depreciation rates on used vehicles are reaching pre-recession levels. The positive growth in used vehicle markets began in 2009.

Fitch states higher vehicle depreciation in 2015 is not expected to have a significant impact on the performance of automotive asset-backed securities (ABS).

Fitch offers a stable outlook for prime-asset performance and positive forecast for ratings performance, which is consistent with 2014. Residual value (RV) performance of U.S. automotive lease ABS transactions moderated in 2014 with lower gains ending December 2014 at a 3.87 percent gain, down from 7.23 percent a year earlier as vehicle values crept lower during the year while used volume rose.

The report predicts used vehicle inventory levels and lease vehicle returns will continue to increase in 2015 by over 10 percent, along with higher vehicle trade-in volumes. These trends will drive RV losses higher throughout the year, but not impact ratings performance. The outlook for asset and ratings performance for automotive lease ABS is stable for 2015, despite these negative trends.

The Black Book-Fitch vehicle depreciation report is a joint venture by the two companies utilizing Black Book’s used vehicle depreciation data, and Fitch’s U.S. auto ABS indices data.

The Black Book-Fitch Vehicle Depreciation Report is available for download by clicking here.

Comment On This Story

Comment: (Maximum 10000 characters)  
Leave this field empty:
* Please note that every comment is moderated.

Article News

Popular Stories


Public Fleet Tracking And Telematics

Amin Amini from Verizon will answer your questions and challenges

View All

Recent Topics

Hi everyone! Just wanted to remind you about fleetDOCs, our library of fleet-related documents. Users can upload any relevant fleet...

View Topic

Here's an EV question or two: How are you paying for the charging station? I have some interested parties in my city, but not an...

View Topic

Fleet Documents

1019 Fleet Documents (and counting) to Download!

Sponsored by

BBL Fleet offers total fleet management solutions including acquisition, lease, financing, fuel and maintenance management, remarketing, accident, driver safety management, analytics, transactional data management, driver/fleet admin tools, reporting, and telematics.

Read more