Five of the most widely used vehicle segments among light-duty fleets saw relatively low depreciation in 2019.
The five segments — which include pickups, vans, SUV/CUVs, compact sedans, and midsize sedans — all depreciated at a lower rate than the overall 12-month depreciation rate for the overall used market, which was 14.9% as of November.
Brian Garner, manager, ARI Remarketing Solutions, noted that light-duty pickups and vans typically perform well in the used market due to their wide application in the fleet markets and that this year was no exception.
John Wuich, vice president strategic consulting services at Donlen mostly agreed with this sentiment, but within his portfolio noticed a slight uptick in depreciation among pickups and vans.
SUVs and crossovers, which have seen increased demand from fleets in recent years, also saw an uptick in depreciation in 2019. Depreciation for the segment is still lower than the overall market, but it is rising compared to previous years.
Much of this uptick is due to the overproduction of SUVs/CUVs. Manufacturers are not only producing elevated levels of SUVs/CUVs to meet consumer demand; they’re also introducing new models within the segment.
“[We’re] watching the SUV and crossover market,” said Wuich. “This segment has greatly increased in new-vehicle popularity, and it is possible that this market may become flooded on the used vehicle side.”
Garner and his team told a similar story.
“There’s a saturation especially among full-size SUVs and crossovers. The market has just become so overwhelmed with the number of brands that offer a vehicle in this segment,” said Garner.
Meanwhile, the oversaturation of SUV/CUVs is having a positive effect on compact and midsize cars.
“I think what you’re finding is kind of a supply and demand equation that’s making some of the small and mid-size cars actually perk up for the first time in a while, simply because there’s just not enough of them on the marketplace to fill the demand,” said ARI’s Garner.
Donlen’s Wuich also saw healthy values for sedan segments. He credited a smaller supply and lower average price point for the segment’s performance.
Some fleet buyers also went out of their way to purchase vehicles that will soon be phased out by manufacturers, Wuich noted.