Used car values forecast to depreciate faster in 2015

Used car values forecast to depreciate faster in 2015

Used car values will likely depreciate at a faster rate in 2015 than they have in the past three years, says a new report by Black Book and Fitch Ratings. The faster depreciation would result from a higher volume of used cars and an increase in off-lease vehicles.

The annual depreciation rate on two-to six-year-old vehicles was 12.1 percent in 2014, but is expected to rise to 14.5 percent in 2015. In 2011, a strong year for used vehicle values because of limited production and low inventory, annual depreciation was just 7.7 percent.

As depreciation rises, residual values for leases could fall, which could cause the monthly cost of a lease to rise, says Fitch.

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