He cited supply as one of the main reasons for this prediction. "We don't expect prices to come down to pre-COVID levels any time soon," Yurchenko said.īlack Book believes used-vehicle values will remain 30 to 40 percent above pre-pandemic levels for the next two to three years, Yurchenko said. Prices on 2- to 6-year-old vehicles peaked at more than 70 percent above pre-pandemic values, he said. However, it will still take a while - "if ever" - for values to return to normal levels, Yurchenko said. "We expect the prices to continue to drop through the end of the year and beginning of next year," he said. The market is approaching normal depreciation in the fourth quarter, Yurchenko added. He said "very high depreciation" began in summer 2022, with prices on 2- to 6-year-old vehicles falling close to 1 percent each week for most of the season. Power.įellow panelist Alex Yurchenko, chief data science officer for Black Book, said at the Auto Finance Summit that his company is even more optimistic about used-vehicle prices than J.D. "It's really gonna be the steepest decline going into 2023, and then kind of leveling off into '24 and '25," she said.īut this "new normal" still edges out what had been the previous residual record of 54 percent of sticker set in 2011, and is even farther above the pre-pandemic 50 percent seen in 2019, according to J.D. This mid-50-percent range represents the "new normal," according to Lanzavecchia.
They would fall again to 56 percent in 2024, then to 55 percent in 2025, according to the company. Power forecasts the true decline to occur in 2023, with residuals dropping to 62 percent of sticker.
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