Used-vehicle depreciation is expected to climb this year as the factors that helped keep it at a lower rate in 2018 appear to be petering out.
Relatively low interest rates, good credit availability, high job growth and tax cuts all came together to put the used-vehicle depreciation rate at 12.4 percent in 2018, compared with 13.2 percent in 2017 and 17.3 percent in 2016, according to data company Black Book.
"We kind of hit a peak on some of these factors that made depreciation very low," Anil Goyal, Black Book's executive vice president of operations, said of the 2018 rate.
Black Book expects the rate, which measures annual depreciation on 2- to 6-year-old vehicles, to grow to 15 percent this year, Goyal said, as the favorable factors from 2018 cool off.
For residual values, the other side of the depreciation coin, TrueCar's ALG, which tracks 1- to 5-year-old vehicles, expects a consistent decline of about 0.5 percent annually over the next three years.
Here are some noteworthy trends analysts are watching in 2019 and beyond: