Black Book report shows premium cars depreciate more

Cars in premium categories experienced highest depreciation rates in 2018

Published: January 29, 2019, 4:30 PM
Updated: November 21, 2021, 2:56 PM

2014 Cadillac XTS - Full-size luxury cars depreciated at the highest rate in 2018.

Black Book has released its Market Insights, looking in depth at auction records to analyze the used car and truck valuation trends over the past year, and showing that premium cars had the highest depreciation rate, while smaller mainstream models registered the lowest.

Cars in the Luxury and Near Luxury categories experienced the highest depreciation rates in 2018, with 18.5% and 18.2%, respectively. Full-size Luxury Utilities (17.8%), Prestige Luxury Car (16.4%), Mid-size Luxury Utilities (15.6%) and Compact Luxury Utilities (15.0%) followed closely behind, while only Minivans broke the streak, registering the third highest depreciation rate, at 17.9%.

At the other end of the spectrum, Compact Vans and Sub-compact Crossovers registered the lowest rates of depreciation, at 5.1% and 5.5%, respectively, with Sub-compact Cars (8.7%), Compact Cars (8.9%) and Small Pickup (9.0%) showing considerably higher values. Full sized Vans slotted in between the two banks of vehicles, with a depreciation rate of 8.0%.

In terms of individual size classes, the premium versions of certain segments had higher rates of depreciation than their mainstream counterparts — Full-size Luxury Utilities (17.8%) vs. Full-size Luxury Utilities (14.5%), Mid-size Luxury Utilities (15.6%) vs. Mid-size Utilities (14.8%), Compact Luxury Utilities (15.0%) vs. Compact Utilities (10.4%), Sub-compact Luxury Utilities (14.2%) vs. Sub-compact Utilities (5.5%), and Premium Sporty Car (12.6%) vs. Sporty Car (10.1%) — counter to the belief that premium cars hold their value better over time.

The report also showed slower depreciation in the previous week, compared to the average the previous month, dropping just 0.44% in a week (the equivalent of a $44-loss for cars and $67 for trucks), compared to overall car segment average depreciation of 0.66% over the previous month, and truck segment (pickups, utilities and vans, combined) average of 0.59%.

The analysis was based on volume-weighted auction selling prices of models from model years 2010 through 2016.