In May, the average price of 2010-14 used subcompact cars in the U.S. plunged 26 percent from year-earlier levels, to $6,683.
That was the sharpest drop of any segment of 2010-14 used vehicles and notably more than the industrywide decline of almost 17 percent, according to Black Book.
Small cars are the canaries in the pricing coal mine. The weakness in prices of small used cars is starting to spill over into the new-car lot, too.
After years of new-vehicle lease growth, a widely forecast surge in off-lease vehicles has started. Because all segments eventually will be affected, automakers are taking steps to soften the blow to prices by finding new ways to encourage sales of those off-lease used vehicles.
Small-car prices already were soft, due to weak demand and cheap gasoline.
Jessica Caldwell, director of industry analysis at Edmunds.com, said a favorable economy is helping consumers buy the exact new and used vehicles they want and generally speaking, they just don't want subcompact cars.
"I think we're seeing the true demand of America being reflected right now," she said. "Gas prices are low, the job market is good and the economy is pretty good. When left to our own devices, we want big vehicles. People are going larger and as a result we have high inventory and low pricing of these small cars."
Dug Dugger, general manager of Ourisman Rockmont Chevrolet in Rockville, Md., agrees. He said the weighted sales rate at his dealership should be 60 percent passenger cars and 40 percent trucks, but in reality those numbers are the opposite. Pickups and SUVs are the "mainstays" at his store, he said.
Indeed, most Chevrolet dealers are happy to talk about Silverado or Colorado pickup sales. But ask about subcompact car sales, and they're likely to pause as they try to remember what's going on at that end of the lot.
Meanwhile, small cars leased to budget-conscious buyers coming out of the recession are starting to flow into the used-car market, whether buyers want them or not. Think more supply, little demand.
Including vehicles in all segments, according to Manheim, about 3.1 million off-lease vehicles are expected to return to the market in 2016, up from almost 2.6 million in 2015. That pool of vehicles is expected to grow to almost 3.6 million in 2017 and almost 4 million in 2018, putting downward pressure on used-vehicle prices across the board.