NADA Sees Redesigns Playing Larger Role in Used Values, Edmunds Releases Q3 Market Report November 25, 2014

NADA Releases Study on Redesigns and Used Vehicle Prices

Jonathan Banks
Executive Automotive Analyst
NADA Used Car Guide

Redesigns present automakers with their best opportunity for market growth; a lack of updates virtually condemns manufacturers to stagnation or decay. 2015 MY will be one of most important in recent memory for shaping automotive landscape when 34 redesigned models will hit marketplace. For context, redesigns have averaged 22 per year since 1989. Changes to the design itself is highly subjective, which makes it harder to estimate total redesign effect.

See NADA’s “How Redesigns Affect Used Vehicle Prices”

Within Design Generation 1 Year-Old Vehicle Usually 15-20% More Expensive than 2 Year-Old:
Redesign increases spread significantly, adding another 15–20% on top of premium already held by 1 YO model.

Life Cycle Duration or Number of Years Since Last Redesign Affect Used Values:
Amount of competition within a segment and the quality of design itself also have effects.

Powertrain Traits – HP, Torque and Fuel Economy – Also Wield Considerable Clout:
All these factors overshadow issues such as reliability, warranty and safety influencing value.

Edmunds Q3 Reports Looks into Effect of Trade Ins and Leasing on Market

Jessica Caldwell
Senior Analyst and Director of Pricing and Industry Analysis

In 2014, 47% of new cars sold in the retail market came with a trade-in – the highest rate since 2006. The new vehicle sales rate is expected to hit 16.5M vehicles this year, which nets a lot of trade-ins and a full dealer used car lot. The high volume of off-lease returns has mostly impacted certified pre-owned vehicle sales, which has experienced that heftiest gain among all used vehicle segments through its ample supply of used lease vehicles.

Here’s Edmunds’ Q3 2014 Used Vehicle Market Report

Consumers See Value of CPO in Depreciation Since Most of it Happens in First Few Years:
There is additional cost with average CPO price $1,341 more than non-CPO counterpart.

Six Year Old Vehicles Bucked Used Car Value Trend By Being Slightly Down:
Attributed to the sales mix being heavily weighted to small cars in 2009.

This Year is Fourth in a Row When Gas Prices Have Stayed within $3 Per Gallon:
Many light truck segments have experienced sizable gains in used vehicle values.
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