A rising supply of used pickups coupled with aggressive pricing for new models is expected to cause a weakening in values in the wholesale market, according to new data from Black Book.
"Higher incentives have crept into the showrooms resulting in more aggressive pricing and deals for consumers," according to John Sternal, a Black Book spokesman. "Furthermore, the supplies of used pickups are stable but forecast to rise from here, resulting in a weakening of retention and overall values."
Full-size pickup trucks are now averaging 12.4% annual depreciation, a significant increase from a year ago, when they were depreciating at an average rate of 3.1%. Depreciation of small pickups has also accelerated. It has reached an annual rate of 8.9%, an increase from 2.9% a year ago.
While depreciation has increased, retained values have fluctuated.
Full-size pickups have increased their average retention from 2010, when they averaged 56% to October 2016, when a three-year-old vehicle retained an average of 64% of its value. Pickup retention rates reached 59% in 2011, 64% in 2012, 66% in 2013, and 64% in 2014, according to Black Book.
The retention rate of full-size pickup trucks has climbed strongly in the past few years until this year when it declined slightly by 2 percentage points. For the 2010-MY, the retention in October 2012 was 56%. In comparison, for the 2014-MY, the retention in October rose to 64%.
Pickups today continue to be among the vehicle segments with the best retention, but increased supply could weaken their position further in the future, according to the data provider.
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