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Resale Value

Black Book Says Seasonal Drop in Resale Values on the Horizon

Resale values have been high for the past two years-plus in the wake of the automotive industry’s 2009 downturn, but recent values haven’t been quite as strong in a number of vehicle categories. As for fleet vehicle segments that are retaining value, core 'fleet' sedans, have resale values that are staying strong.

Used Compact Car and Hybrid Values Heading Upward, KBB Reports

KBB stated that in 2011, fuel-efficient vehicle values hit record levels when gas prices approached $4 per gallon, and if prices continue to rise, the company expects to see a similar trend this year and for values to increase within the next 30 to 60 days.

Resale Values Forecast to Decline 10-15% by 2014 as Used-Vehicle Supply Increases

Today’s high resale values are an anomaly caused by the shortage of used vehicles in the wholesale market due to the extremely low sales of new vehicles during the 2008-2011 timeframe. Nowadays, everyone is a hero when it comes to getting top dollar for their out-of-service fleet vehicles. However, these artificially high prices will ultimately decline as used-vehicle supply increases.

Fleets Reassess Amortization Rates

In the commercial fleet industry, the most common amortization rate used for establishing a depreciation reserve is 50 months. Recently, some major fleets extended amortization rates on new-vehicle orders.

Depreciation Up in Most Vehicle Segments

According to industry analysts, most vehicle segments increased in vehicle depreciation in 2009 due to such factors as extended replacement cycling, shifts in the wholesale vehicle market, and higher capitalized vehicle costs.

Top 6 Fleet Trends in the Medium-Duty Truck Market

Medium-duty truck sales have declined sharply, as have resale values, due to the recession and the slowdown in new construction. Many fleets are extending service lives, which threatens to increase future maintenance costs.

The Hidden Cost of Personal Use

Many companies are wondering whether they are charging enough for personal use. At some companies, this discussion is long overdue. When re-evaluating personal use charges, a common mistake is to focus solely on the cost of fuel. However, doing so ignores the other “hidden” costs of personal use, which have also risen.

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