Historical Impact of 2018 Spring on Car Values

Spring is typically viewed as a strong season for dealers, since many people receive their tax rebate checks and immediately use them to purchase a used car or truck. This past spring season, which takes place between February 1 - May 1, four mainstream car segments increased on average by 3.0%:

 

Sub-Compact Car

+2.6%

Compact Car

+5.3%

Mid-Size Car

+3.1%

Full-Size Car

+1.0%

 

  

In the prior year in 2017, the spring seasonality lift in values was little, if any. During the same months in 2017, the values on these car segments was almost flat, increasing by just +0.3%.

 

During the same period for 2016, only one of these car segments increased in value; overall, the values declined by 0.9% on average across the four segments.

 

"I believe what we’re seeing is a handful of factors coming together this spring season that has brought us to a strengthening of the used market for mainstream car segments," said Anil Goyal, Executive Vice President, Operations at Black Book. "With lower demand, these sedan segments dropped in value for used vehicles, entering 2018 where their prices reached a point of attractive value for many shoppers. Second, much of the excess used supply was absorbed in late 2017 due to replacement demand caused by the hurricanes. Third, the additional money due to the tax reform has helped with vehicle affordability. Fourth, the economy continues to hum along with consumer confidence reaching its highest point in 17 years. Lastly, with gas prices on the rise, there are a few more shoppers looking at mainstream sedans with fuel economy in mind."

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