Automotive Fleet

DEC 2013

Magazine for the car and truck fleet and leasing industry

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DEPRECIATION Average Monthly Miles Average Months in Service Average Cap Cost Monthly Depreciation Cost in CPM Depreciation Dollars per Month 2013-CY DEPRECIATION EXPENSES: FULL-SIZE VANS 2,217.93 39 $21,969.28 $0.18 $389.22 There continues to be a limited supply of used minivans in the wholesale market, putting upward pressures on their resale values. Services, "depreciation trends for compact cars in CY-2013 are down approximately 3 percent compared to CY-2012." However, compared to 2012, there was "slightly greater depreciation for compact cars in 2013," added Xamplas of Donlen. ● Light-Duty Trucks: In CY-2013, truck depreciation was less than that of the cars. During the past year, 14 of the 24 segments tracked by Black Book depreciated less than pre-recession levels. Twelve of those were truck-related, with the top four being the three pickup segments and the compact SUVs, all decreasing at less than 6 percent. "Te light-duty truck segment continued to be stronger than CY-2012, as the market experienced used-supply shortages, greater demand, improving economy, and higher newer truck costs, which all contributed to the higher prices for used trucks for CY2013," said Aiken of Wheels. One key reason for the residual strength in the truck segment has been increased vocational demand for used trucks as the housing and construction markets begin to improve. "Vehicle depreciation for light-duty trucks decreased slightly from an average of 1.27 percent to 1.17 percent in 2013, compared to 2012 numbers. While we saw an increase in the average months in service (12.3 percent) from 54.6 to 62.2 months and a rise in capitalized costs (8.4 percent), the average monthly miles decreased slightly from 2,067 to 1,951 (-5.9 percent)," said Graham of ARI. GRAHAM Compared to CY-2012, trucks were a bright spot in feet remarketing with "slightly less depreciation in 2013," said Xamplas of Donlen. A similar observation was made by GE Capital Fleet Services. "Depreciation trends for light-duty trucks in CY-2013 were up 28 AUTOMOTIVE FLEET I DECEMBER 2013 Average Monthly Miles 2,274.82 Average Months in Service Average Cap Cost 50 $23,626.06 Monthly Depreciation Cost in CPM Depreciation Dollars per Month $0.16 $349.42 SOURCE: AF RESEARCH DEPT. SOURCE: AF RESEARCH DEPT. 2013-CY DEPRECIATION EXPENSES: MINIVANS Resale values for full-size vans had an uptick in resale values as business activity increased in the construction and services industries. approximately 5 percent compared to CY-2012," said Jastrow of GE Capital Fleet Services. Te key factors keeping truck depreciation low was the uptick in home conJASTROW struction, lower fuel prices, and increased truck fuel efciency. "Depreciation costs for light trucks were static for CY-2013 compared to CY-2012. Light trucks were the winning segment in CY-2013 in terms of year-over-year resale prices, due to increased demand from lower fuel prices and the resurgence in new-home construction. However, depreciation costs held rather than fell for the he segment due to higher transaction prices for our mix of units sold in CY-2013," said Langmandel of LeasePlan USA. ● Minivans: "Vehicle depreciation for minivans has remained relatively fat, decreasing g slightly from an average of 1.48 per percent to 1.46 percent in 2013, compared to 2012 numbers. While we saw an increase in average capitalized costs (1 percent), the average monthly miles decreased slightly from 2,270 to 2,251 miles (-0.9 percent) and the months in service decreased from 44.3 MIS to 44 MIS (-0.8 percent)," said Graham of ARI. However, there continues to be a limited supply of used minivans in the wholesale market, vis-à-vis buyer demand, which is putting upward pressure on their resale prices. "Depreciation costs for minivans for CY2013 were lower than CY-2012, but not by much as this segment continued to see strong prices due to limited supply and the continued popularity of this segment in the retail market as people movers," said Aiken of Wheels. Compared to 2012, minivan depreciation was "slightly more in 2013," said Xamplas of Donlen. ● Full-Size Cars: "Vehicle depreciation for full-size sedans decreased from an average of 1.17 percent to 1.05 percent in 2013, compared to 2012 numbers. While we saw an increase in average capitalized costs (0.2 percent), the months-in-service and average monthly miles decreased slightly from 60.4 MIS to 58 MIS (-4.1 percent) and from 2,201 to 2,080 miles or -5.8 percent, respectively," said Graham of ARI. Similarly, supply was tight for full-size cars, while they have become more attractive to used-vehicle buyers due to their improved fuel efciency. "Full-size vehicles experienced slightly lower depreciation costs for CYlo 2 2013 versus CY-2012 as supply and demand continued to be strong and fuel economy for full-sized sedans continues to improve," said Aiken of Wheels. Compared to CY-2012, depr preciation was greater in 2013, acco according to Xamplas of Donlen. ● SUVs: "In CY-2013, depreciation costs increased slightly compared to CY2012 as supply increased in the segment this year causing a slight drop in prices," said Aiken of Wheels. Te higher inventory of SUVs in the wholesale market caused an uptick in depreciation. "Vehicle depreciation for SUVs decreased from an average of 1.31 percent to 1.29 percent in 2013, compared to 2012 numbers. Tis segment of vehicles saw an increase in average capitalized costs (5.8 percent), monthly miles (1.3 percent), and months in service (1.3 percent). Te average monthly miles and months in service shifed from 2,070 to 2,098 miles and 34.6 MIS to 36.6 MIS respectively," said Graham of ARI. Compared to CY-2012, depreciation was "greater in 2013," said Xamplas of Donlen.

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