Analysts: Used-pickup prices keep truckin'

Used-vehicle prices have peaked for 2013 and are expected to stabilize lower than in 2011 and 2012, but higher than before the recession, analysts say.

They also say that strong demand for full-sized pickups will buoy prices in that segment.

For instance, prices of used pickups less than 9 years old increased 7 percent through April from the year-earlier period, says Larry Dixon, an analyst at NADA Guide. Used-vehicle prices overall rose less than 1 percent, he says.

"We expect large pickups to be one of the better-performing segments for the year," Dixon says. "They've got a couple of things going for them. Used supply is still fairly low relative to where we were just a few years ago [as a result] of reductions in production and retail sales going back to high gasoline prices in 2008.

"You also have the growth and improvement in the housing market."

Ricky Beggs, managing editor of Black Book, agrees that used pickups are in demand. Though incentives have been common on some new full-sized pickups -- especially those built by General Motors -- the impact on prices of their late-model, used counterparts has been minimal, he says.

Black Book calculated, for instance, that as of May 1 the average price of 2007-11 full-sized pickups was $22,036, a 5 percent decline from their average price on May 1, 2012, when the vehicles were a year younger and had fewer miles.

That decline was considerably smaller than usual. The typical one-year depreciation for 2- to 7-year-old full-sized pickups before the economic downturn was 15 percent, Beggs says.

"That just goes to show how much interest there is in full-sized pickups," he says.

Analysts agree that used-vehicle prices peaked in March and April. They predict prices will stay relatively high this year but soften as more off-lease vehicles and trade-ins from new-vehicle sales re-enter the market later in the year.

Used-vehicle prices are also settling into seasonal depreciation patterns that were more typical before the recession, says Alec Gutierrez, an analyst at Kelley Blue Book.

Gutierrez says used-vehicle values for January through April were only 3 to 4 percent below the all-time high in 2011. He says small-car prices spiked in March compared with February, in lock step with higher gasoline prices. But those prices started retreating in mid-April as gasoline prices fell.

Though Gutierrez and NADA Guide's Dixon differ over how many more off-lease vehicles are expected to re-enter the market this year than last year, their respective estimates top out at 400,000 to 500,000 units.

"On the whole, we're seeing used-car values at about 1.5 to 2 percent lower than this time last year," Gutierrez says. "If you look at the 2012s compared to the 2011s last year, we're actually seeing declines of 5 percent year over year.

"In the second quarter, we're expecting a mild decline of 1 to 3 percent generally across the board. But if anything is going to buck the trend, it could be pickup trucks."

The Manheim Used Vehicle Value Index, which is adjusted for model mix, mileage and time of year stood at 119.2 in April, down from 120.4 in March. It was also down from 126.1 in April 2012 and 126.6 in April 2011, but up from the 114.2 in April 2007.

The index started in January 1995 at 100 and measures changes in used-vehicle prices.