Subcompact Crossovers Are Depreciating Faster Than Any Other Segment

Remember how Beanie Babies were a national phenomenon in the mid-1990s? The country couldn’t seem to get enough of the little darlings and many ended up going for astronomical prices. But, like most stupid trends, their popularity was short lived. It wasn’t long before the once-collectible toys held the same value as a used pair of underwear.

Subcompact crossovers may be suffering a similar fate. With the CUV craze in full tilt, automakers have been capitalizing by providing budget-minded shoppers with small and affordable variants. However, the group currently faces the heaviest depreciation of any automotive segment.

Market analysts at Black Book cited subcompact crossovers as losing 1.18 percent of their original value this week. Full-sized cars took the second heaviest hit at 1.17 percent per week — followed by subcompact and sporting cars at 0.98 and 0.97 percent, respectively. While those differences don’t sound terribly dramatic, keep in mind these vehicles have differing MSRPs. That translates to the baby crossovers shedding $133 of their original value against full-sized cars only losing $116. Meanwhile, those subcompacts riding closer to the ground gave up $51 this week.

It’s not an isolated incident either. Going back to the middle of July in 2016, Black Book had all subcompact crossovers losing 0.79 percent per week. At that time they were only beaten by their luxury equivalent, which depreciated by 1.01 percent. There is plenty of flux from week-to-week but the littlest late-model crossovers are typically poor at maintaining their original value. The same cannot be said for their larger brethren.

“Cars continued to depreciate at a steady rate while most SUV segments did better in the second week of the year [than before],” explained Anil Goyal, executive vice president of the auto valuation firm’s operations. “Generally, activity was reported to be slow in the auto auctions.”

What’s to be gained from this information? Well, if you’re buying new, you might be better off purchasing an sedan (luxury or otherwise) if you want it to maintain its resale value. However, if you’re shopping for the truck or SUV, bigger is usually better when it comes to deprecation.

[Image: Honda]