The Car and Truck Fleet and Leasing Management Magazine

Sluggish Economy Affecting Resale Values of Luxury Vehicles

December 21, 2007

GAINESVILLE, GA – The struggling U.S. economy is now having a negative impact on the resale value of premium sporty and prestige luxury vehicles. According to Black Book, the resale value of luxury vehicles had an average depreciation of nearly $3,000 over the last three months.

“The most recent survey of the used-car market shows that vehicle values have been depreciating, while the luxury vehicle segment has taken the hardest hit,” said Ricky Beggs, vice president and managing editor at Black Book. “The concern over the tough economy seems to be one of the biggest hurdles for the luxury segment.”

Of the 230 models surveyed during the most recent period, none showed an increase in value, revealing the tension consumers feel over the recent economic struggles. Forty-seven percent of the surveyed models depreciated more than $1,000, and luxury vehicles showed the greatest depreciation; this is a trend that began earlier this year and has continued to worsen.

The most recent survey examined vehicle resale values from Sept. 1 through Nov. 30, 2007. During this period, only approximately six percent of vehicles showed a depreciation of less than $300, compared to 11 percent of vehicles that showed the same slight depreciation during the previous survey period.

Five of the six vehicle segments with the lowest depreciation included pick-up trucks, full-size vans, and compact SUVs. This shows that despite higher than normal gas prices and the push for a greener environment, consumers are still interested in the functionality and size of these vehicles, according to Black Book.

“Despite the recent survey results, Black Book has hope for the future,” Beggs said. “Spring is typically the season where auction activity and market values rebound, strengthening business for dealers and remarketers; hopefully this trend will continue in 2008.”

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