IRVINE, Calif., Oct. 26, 2016 /PRNewswire/ -- The analysts at Kelley Blue Book www.kbb.com, the vehicle valuation and information source trusted and relied upon by both consumers and the automotive industry, today report that rising manufacturer suggested retail prices (MSRPs) are not translating into higher retention values for 1- to 3-year-old vehicles at auction, as covered in the company's Blue Book Market Report for the third quarter of 2016.
"Despite the average cost of a 1- to 3-year-old vehicle at auction remaining relatively unchanged over the past several years, the average retention value of these vehicles fell by roughly 4 percent in the third quarter," said Sean Foyil, analyst for Kelley Blue Book. "These vehicles have higher initial costs and may be better-equipped than those in previous years, so this may indicate that buyers at auction are not willing to pay a premium for these vehicles due to the saturation of vehicles available in the market. With such a large supply of used vehicles, many of which may contain added packages and technology upgrades, there is not enough incentive to pay more at auction."
Overall, auction values for used 1- to 3-year-old vehicles declined 4.6 percent, or roughly $807, in the third quarter of 2016. Average auction volume remains at higher levels than in previous years with volume in the third quarter averaging roughly 11 percent higher year-over-year, due to sustained high levels of lease-returned vehicles.
In addition, the compact and mid-size car segments have both underperformed when compared to the overall market average year-to-date, declining 9.7 and 10.8 percent respectively. These segments are performing at lower levels than the past two years due to increased lease-return volume and heightened competition from the compact utility segments. Meanwhile, 2015 model-year mid-size pickup trucks remain the strongest segment with an average value retention rate of 87 percent, 10 percent higher than the next best segment – performance cars. To read the full report, please visit: http://mediaroom.kbb.com/market-report.
The Blue Book Market Report is a quarterly publication that explores the state of the automotive industry by analyzing Kelley Blue Book® Auction Values. The report also discusses trends in monthly used-car shopper activity on KBB.com. If you would like to subscribe to the quarterly Blue Book Market Report, please e-mail [email protected].
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About Kelley Blue Book (www.kbb.com)
Founded in 1926, Kelley Blue Book, The Trusted Resource®, is the vehicle valuation and information source trusted and relied upon by both consumers and the automotive industry. Each week the company provides the most market-reflective values in the industry on its top-rated website KBB.com, including its famous Blue Book® Trade-In Values and Fair Purchase Price, which reports what others are paying for new and used cars this week. The company also provides vehicle pricing and values through various products and services available to car dealers, auto manufacturers, finance and insurance companies, and governmental agencies. Kelley Blue Book's KBB.com ranked highest in its category for brand equity by the 2016 Harris Poll EquiTrend® study and has been named Online Auto Shopping Brand of the Year for five consecutive years. Kelley Blue Book Co., Inc. is a Cox Automotive™ company.
About Cox Automotive
Cox Automotive Inc. is transforming the way the world buys, sells and owns cars with industry-leading digital marketing, software, financial, wholesale and e-commerce solutions for consumers, dealers, manufacturers and the overall automotive ecosystem worldwide. Committed to open choice and dedicated to strong partnerships, the Cox Automotive family includes Autotrader®, Dealer.com®, Dealertrack®, Kelley Blue Book®, Manheim®, NextGear Capital®, vAuto®, Xtime® and a host of other brands. The global company has nearly 33,000 team members in more than 200 locations and is partner to more than 40,000 auto dealers, as well as most major automobile manufacturers, while engaging U.S. consumer car buyers with the most recognized media brands in the industry. Cox Automotive is a subsidiary of Cox Enterprises Inc., an Atlanta-based company with revenues of $18 billion and approximately 60,000 employees. Cox Enterprises' other major operating subsidiaries include Cox Communications and Cox Media Group. For more information about Cox Automotive, visit www.coxautoinc.com.
SOURCE Kelley Blue Book