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Used Trucks And SUVs Decline In Value

Compact cars such as the Honda and Chevrolet Aveo are now expected to retain more of their value than trucks and sport utility vehicles, once prized for their resale demand, according to a firm that tracks car values.

Automotive Lease Guide Inc., which provides residual value forecasts, attributed the reversal to soaring gas prices and a weak economy that have steered consumers away from gas-guzzling SUVs and trucks and toward more fuel efficient cars.

Residual value forecasts for compact cars with high fuel efficiency, including hybrids, rose an average of 5 percentage points, while the outlook for full-size pickups and full-size and midsize SUVs fell an average of 8 points

Lower used car values also mean higher leasing costs for automakers and consumers.Wholesale prices of used trucks and SUVs have dropped significantly in recent months, according to data released by the National Automobile Dealers Association Used Car Guide.

Prices of used pickup trucks tumbled 11.2 percent during the second quarter, while prices of used cheap SUVs fell 9.6 percent.At the same time, prices of passenger cars rose 3.5 percent, boosted by strong demand for compact and midsize models.

The NADA also attributed the changes to rising fuel costs, saying that for every $1 increase in the cost of a gallon of gas, large pickups decline in value by an average of $2,200, while resale prices of compact cars rise by an estimated $980.

The group added that the effects of high gas prices have become a long-term depreciation trend, and as a result, it is making “fairly aggressive” devaluations of trucks and SUVs through the end of the year.