Ga. The average price of a used vehicle for model years 2011-2015 depreciated 2.4% during August, noticeably more than July 1.5% decline, according to sources. The decline is also notably more than what was recorded the last three years during the month of August even higher than August 2014 1.9% depreciation rate. Cars overall recorded the highest depreciation, with prices falling 3.1% compared to 1.9% in July. Truck segment showed depreciation of 1.8% for the month, with all vehicles currently averaging a 12-month depreciation change of 16.2%.
Depreciation for near-luxury cars, including the Acura ILX, Audi A4, BMW 3-Series, Cadillac ATS, and Lexus IS250, was the highest at 3.7%. Vehicles in this segment finished the month with an average price of $18,112, a 19.5% decline from year-ago levels ($22,501). Full-size pickups, including the Chevy Silverado, Dodge Ram, Ford F150, and GMC Sierra, recorded the highest retention, with prices depreciating only 0.6%. Vehicles in this segment finished the month with an average price of $24,372, a 10.2% decline from a year ago ($27,152).
Four other vehicle segments saw depreciation of 3% or greater in August. Those segments were the sub-compact car (3.5%); sporty cars (3.4%); luxury cars (3.3%); and compact cars (3.3%). The top six segments with the weakest retention during August were all cars. And while prestige luxury cars recorded the strongest retention among all car segments, its 2.2% depreciation rate made it just the eighth best-performing segment overall for the month. In fact, just two car segments ranked in the Top 12 among retention for the month (premium sporty car depreciated 2.7%).
Delinquencies on subprime auto loans packaged into bonds rose in January to 4.7 percent, a level not seen since 2010, according to data from Wells Fargo & CoMore borrowers with spotty credit are failing to make monthly car payments on time, a troubling sign for some lenders, automakers and dealers.Investors who have snapped up billions of dollars of securities backed by risky auto debt are also vulnerable, analysts say.Delinquencies on subprime auto loans packaged into bonds rose in January to 4.7 percent, a level not seen since 2010, according to data from Wells Fargo & Co.
Rising delinquencies come as a warning sign that more loans may end up in default down the road, said John McElravey, an analyst at the bank.What may be most troubling, however, is that the default rate is already climbing, up to 12.3 percent in January from 11.3 the prior month. That is the highest rate since 2010, the data show.Securities backed by auto loans are structured to absorb a portion of anticipated defaults, but concerns have mounted over the last year that cumulative losses on auto loan securitizations may end up exceeding initial estimates, thanks to declining underwriting standards.Loan performance may be worsening because of a number of factors, including a rise in initial jobless claims, said McElravey.
He identified an auto finance company in Texas, for example, that began experiencing a noticeable increase in net losses six months ago. The increase coincided with a rise in unemployment in Texas, where the oil industry has been hit hard by prolonged low prices, he said.The data are worth watching closely, he added, especially against the backdrop of sub-par economic growth.