Used Car Prices Expected to Fall

If you’re in the market for a used car, this year might be a good one to buy.

According to the latest joint vehicle depreciation report from Black Book and Fitch Ratings Inc., used car prices are expected to drop in 2015 at an accelerated rate due to increased supply and larger off-lease volumes. The report states that 16.5-million new vehicles were sold last year and Black Book forecasts that new car sales will reach over 16.7-million vehicles this year. In addition, the annual depreciation rate on used vehicles last year was reportedly 12.1 percent but is expected to rise to 14.5 percent this year.

SEE ALSO: How to Test Drive a Used Car

The study also notes that used car inventories and lease returns are expected to grow 10 percent this year. Naturally, as more used cars hit the market, prices will fall. The depreciation report uses Black Book’s used vehicle depreciation data combined with Fitch’s U.S. auto ABS indices data.

“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, Vice President of Analytics and Strategic Partnerships for Black Book. “Looking ahead, lower consumer demand and CAFÉ-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.”