Analysts at Kelley Blue Book (KBB) reported that average values for one- to three-year-old pickup trucks have remained strong as a result of high demand at auction, despite fuel prices peaking in December 2016. This information was covered in the company's Blue Book Market Report for the fourth quarter of 2016.
"Historically, fuel prices and pickup truck segments have maintained an inverse relationship," said Sean Foyil, analyst for KBB. "As fuel prices increase, demand for trucks tends to decline. While pickups continued to see exceptionally high demand throughout 2016, despite a 10% increase in December in the average cost of fuel, 2017 could turn out to be a tough year for trucks as fuel prices are expected to continue increasing through the first quarter."
In addition to rising fuel costs and previously announced increased oil production cuts from the Organization of the Petroleum Exporting Countries (OPEC), potential interest rate hikes in 2017 may impact housing construction, which could lead to a decrease in orders of full-size pickups used in construction. Furthermore, auction supply from off-lease vehicle returns is expected to continue growing for the foreseeable future. As such, the pickup truck segments may face a more challenging year in 2017, according to KBB.
Overall, auction values for one- to three-year-old vehicles were down more than 15% for 2016. In just the fourth quarter, values fell a substantial 6.8% (or $1,146) per unit.
Demand for pickup trucks has been exceptionally strong this year as fuel prices averaged $2.14 per gallon, according to KBB. Partially responsible for such demand are relatively new entrants into the mid-size pickup truck segment, such as the Chevrolet Colorado and GMC Canyon, which are both all-new for model-year 2015, along with a completely redesigned Toyota Tacoma for model-year 2016.
The full-size segment has also drawn more attention with such upgraded models as a new generation Nissan Titan for model-year 2016 and a new generation Ford F-150 for model-year 2015.
According to Kelley Blue Book, the top five performing full-size pickups in 2016 (one- to three-year-old vehicles) were:
- Nissan Titan: -2% (-$498)
- Toyota Tundra: -8% (-$1,802)
- Chevrolet Silverado 1500: -9% (-$1,881)
- Ram 1500: -11% (-$2,032)
- Ford F-150: -11% (-$2,083)
According to Kelley Blue Book, the top five performing mid-size pickups in 2016 (one- to three-year-old vehicles) were:
- GMC Canyon: 0% ($21)
- Chevrolet Colorado: -4% (-$903)
- Toyota Tacoma: -7% (-$1,600)
- Nissan Frontier: -9% (-$1,390)
- Honda Ridgeline: -20% (-$4,745)