Fuel Economy Becomes a Factor in the Used-Car Market

Black Book's recent 3-month analysis confirms fuel economy is becoming a driving factor in the used-vehicle market.

The rate of depreciation for 3-year old vehicles is starting to decline — from 6.2% in the 3-month period January through April to 5.8% from February to May, according to Black Book, which publishes daily new-and used-vehicle pricing data.

Greater interest in cars and trucks in the compact, entry mid-size and upper mid-size categories, whose average depreciation is at $257, is driving the decline and, as a result, is offsetting higher depreciation rates for larger vehicles.

Black Book data show depreciation for vehicles in the premium, luxury, SUV and fullsize pickup categories remains high at $2,058.

“It means the market has picked up a little bit — at least for the smaller vehicles,” says Ricky Beggs, vice president and managing editor for Black Book. “The larger vehicles, such as pickups and SUVs, held their values amazingly well even when gasoline rose to $3 a gallon.

“But as it marches to $4 a gallon, we're seeing that consumers are really having to justify owning one, and it seems that the casual drivers who like them, but don't really need them, are moving into smaller vehicles,” he says.