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]
How will NormSVarea51 offload his fleet of murdered-out and chipped/Trifecta Tuned Buick Encores that make 398 HP/412 lbs -feet of torque, that get 64 mpg highway/59 mpg city without taking it in the shorts?
Have you learned nothing? He’ll cash in some 2018-dollars GM stock, use that gravity-bending torque to slingshot around the sun and reverse time, convert it to 1950s dollars, invest it back into stock, then reap the rewards of seven decades of growth and reverse-inflation.
And it will STILL circle the skidpad at a higher g than the CR-V.
Is this before or after he repopulates the world’s oceans with humpback whales?
The alien probe hasn’t arrived yet and I can’t see Norm caring about whales. But I can see him trying to repopulate car dealerships with turbos and tuned ECUs in a future with only autonomous EVs for sale.
BUT ONLY GM DEALERS. The Japanese marques can go suck EV eggs.
Hah! You misunderestimate the Japanese electronics know-how. They’ll refine their hybrids to drive 3 months or 6,000 miles on a single charge, obtaining 163 MPG on regular. With alternate reality glass, a driver will step into his Yaris and have the space and luxury appointments of an S-Class.
Good news for my girlfriend, who likes buying used and has had her eye on a HR-V.
Fascinating, can you please explain her rationale?
She wants something small with AWD, doesn’t want to spend a lot, and doesn’t like Imprezas.
Well you could always show her a Crosstrek… ;)
Already did. It’s a nope.
(Too much money.)
We were utterly unimpressed with a Crosstrek. Has all the charm of a Coleman cooler.
“We were utterly unimpressed with a Crosstrek. Has all the charm of a Coleman cooler.” Quote of the day by APaGttH!
you are talking about a Honda, so don’t get your hopes up on the low price. This article is in general.
I can find quite a few of them around Denver with low miles for well under $20,000. And that’s even considering that these are AWD vehicles being sold in Denver during the dead of winter.
Deals can be had.
Certainly worth investigating but the question is why? Do these just suck in the snow? The Honda Jazz from which this is derived does not seem to have an AWD option. The platform geometry really may not be optimized for it, hence the “deal”.
That’s a good question, 28. Far as I’m concerned, the HR-V is something I’d never buy, but it’s her money and her car, know what I mean?
Under $20K for a new Encore is what the radio ads of local dealerships are advertising. You can find a better quality Encore, compared to tin box HR-V for less online, at most dealerahips and have it shipped to your door.
Plus you get a longer 4 year, 50,000 mile warranty included.
Encore is a heinous looking lump. No way.
The 2016 and later Encore has the new design theme and new headlights with blacked out tailights. I especially like the look in white.
Once you drive one you understand vs the pathetically, untorque 1.8l Honda.
If I wasn’t buying and was forced to drive it…I would rather have a used 2002 Honda CR-v with 100,000 miles than a brand new Buick Encore.
Thr wife’s Aunt had 2002 CR-V before going to a Escape and never looked back. It was well rusted and needed much attention even at 80,000 miles.
“Subcompact Crossovers Are Deprecating Faster Than Any Other Segment”
-TTAC commenters have deprecated the Buick Encore and its ilk more than any other segment.
THe Chevy version of the Encore is especially dire, gets lousy reviews and, I suspect, leads the category in depreciation.
At least until Nissan drops its commerce on US.
Just wait till North American reviews of the EcoSport come in. First looks at NAIAS have me worried.
I read the UK and Oz reviews of the “updated” 2018 Ecosport last week. You don’t have to wait for US reviews. It’s a complete dog, with glacial acceleration even with a 221 lb-ft diesel, and an unsettled ride with doughy handling. They all wonder how a raised Fiesta can be made to perform so badly.
The HR-V AWD is $22K on cars dot com where the Trax 1.4T AWD is $12K. Go back to used 2016 at 20,000 miles and the Honda had dropped $3,000,to $19K, the Chevy “appreciated” $3,000 to $15K.
Crazy cash on the hood makes some Trax owners very savvy investors, for the short term.
“The HR-V AWD is $22K on cars dot com where the Trax 1.4T AWD is $12K. Go back to used 2016 at 20,000 miles and the Honda had dropped $3,000,to $19K, the Chevy “appreciated” $3,000 to $15K.”
ALL THOSE CHEVY TRAX 1.4T OWNERS HAVE TO DO IS A TRIFECTA TUNE AND THEY’LL BE HANGING WITH C7 VETTES IN THE CORNERS AND STOMPONG DODGE DEMONS IN THE TRAFFIC LIGHT GRAND PRIX!!!
“Trax owners” ; “savvy investors”
I spotted an oxymoron off the port bow, Cap’n!
I still don’t know if NormSVtrifectaTuneArea51 is a serious-minded and straight talking (hallucinating?) person, or a brilliant and dry-witted comedian, but either way, I’m very much glad he keeps the straight-up dope comedy coming and sticks around.
The Trax and Encore/Clowncore are two of the biggest automotive piles of $hit of this decade*.
*Though, to be fair, from a driving dynamics, space utilization efficiency, and NVH and driving comfort viewpoint, most subcompact CUVs are steaming piles.
Cheap subcompacts morphed into cheap subcompacts for more money. But they’re hip!
Only thing steaming behind thr Encore is the 80K in sales. Acura CDX is missing out on that party.
If the $12,000 price advertised isn’t just a bunch of bait-and-switch vaporware, I’d say it would be a pretty good investment, actually. It should run just fine for four or five years, at which point you dump it and get something else. Not a bad investment after all, if you think about it.
(Assuming, of course, you can deal with having a Trax…)
This Trax is $13K. I’d recommend to drive one locally and print this sale off to see if they match it considering shipping costs from out of area. Don’t golf carts cost around a couple of thousand?
http://www.autonationchevroletpembrokepines.com/VehicleDetails/new-2018-Chevrolet-Trax-FWD_4dr_LS-Miami-FL/3119077303
But the Trax is a perfect replacement for your worn out PT Cruiser!
“Deprecating” and “depreciating” have very different meanings. I think you guys mean the latter.
Deprecate means “to express disapproval of.” Depreciate means “to lower in value or esteem.” So although the words are actually somewhat related, to use them interchangeably is incorrect. Blame autocorrect…
No, blame the author and lack of proofreading before sending the finished product to the editing department. Blame the editing department for not catching the mistake and posting it.
> Blame the editing department for not catching the mistake and posting it.
And yet if, Jack had wrote it, we would have taken to be one of his intentional witticisms.
The title has been altered for those of you who don’t care for or understand double entendre. You may now stop defecating in your pants.
I’m happy to see it wasn’t “stupid” this time :D
I usually just sweep it under the rug when that’s the case and live quietly with the shame.
@Matt Posky – “You may now stop defecating in your pants.”
I don’t want to think about which segment of your readers defecates faster.
Nor do I. But the comments section usually spells it out.
Step 1: commit a dumb mistake. Step 2: when caught pretend it was a joke. — Every journalist.
“Blame autocorrect…”
I TYPED RANDOM LETTERS ONTO THE SCREEN. I LET SPELL CHECK SORT IT OUT. IT DIDN’T TELL ME ANYTHING WAS WRONG, SO…
Probably a function of the fact that they are grossly overpriced to begin with. The difference in size, speed, comfort, and perceived quality between the subcompact and compact CUV classes is far greater than the $2-4k price spread would suggest.
That was my thought too. A loaded out Encore has an eye watering sticker price. I get it, no one is going to pay sticker (for the most part) but then the discounting makes depreciation look worse.
I am surprised that subcompact SUVs are depreciating faster than subcompacts, as that class of vehicle is just about dead.
I’d agree with this but their strategy is a ‘chicken in every pot, a CUV in every drive’. I personally see no depreciation, are these single digit falls just statistical anomalies?
I see people who look at the CRV Rogue CX5 and they cant stump up the $35k etc. that it costs and a basic subcompact SUV is in the low $20s so I can see it. Also some people just cant drive that CUV size.
There’s a big article waiting to be written about GM’s tactic of grossly overpricing its MSRPs, its possible purposes in doing so, and the unintended consequences. For instance, the dealer can provide a great deal on an expensive model, giving you a “steal”, but does the size of the discount make buyers wonder what’s wrong with that model and kill its popularity and resale value?
‘Er Indoors’ has informed me that our next vehicle should be a sub-compact CUV/SUV or a Kia Soul. She wants something relatively ‘easy to drive’ (read small) that can still sit 4 and has a high driving position and more ground clearance than a standard sedan.
And it will be FWD.
So all the B&B can accuse me of getting one of ‘the worst vehicles on the market’.
But as long as it has the above listed, plus heated seats, A/C, and Bluetooth she will be happy. If it also has good ‘crash scores’, good reliability, favourable incentives and fits my budget, I will be happy.
It’s not like I will drive it more than a couple of times each month (to get gas, wash/clean it, etc).
The Encore has about $10,000 on the hood. They sell everyone they have. Especially the Base/Convince model in FWD.
Well, when you take the worst aspects of subcompacts and crossovers and charge a lot of money for them, it’s to be expected. This is the most cynical, cash-grabby segment by far. Manufacturers would be smart to just sell the previous generations of their compact crossovers instead.
Hardly surprising as the subcompact CUVs don’t offer any more room than a hatch (often less) and the current crop are pretty pedestrian.
The CR-V is just vastly superior to the HR-V all around.
But girls think it looks so cute, and that is why they buy them. Believe me, when it comes to selling cars to women, they don’t always think about practicality or utility and functionality. They do tend to think about those things when they are a little older and have children and need space and functionality though.
You’re just noticing this now?
You should have seen the face my wife when I suggested that maybe a Verano would be a more logical choice than a Terrain if she absolutely had to buy from the Buick/GMC dealer.
You’d think I had just suggested she buy a minivan.
There’s a difference between a Terrain and a minivan? Other than the minivan is somewhat better?
Nods head in approval.
Shhhhhhhh don’t tell the women folk they’re driving tall wagons or short minivans…
Every day
I assume the author meant depreciating… Anyway, who cares about the cost of depreciation when it amounts to 12$/mo over 84-months? That’s only two lattes! (actually it’s much more than this, but that’s the mindset)
Okay, has anyone taken a stats course or one on critical thinking skills? This report is fake news / junk science at its worst. Go to the black book website and pull up their report from 2 weeks ago. They show midsize sedans depreciating at essentially twice the rate of subcompact crossovers. Anyone foolish enough to extrapolate a 1 week change (based on a non-homogeneous group of vehicles that range from model years 2009 to 2015 with varying levels of options, Model mix, model year mix, etc. Etc.) should be forced to listen to a Ben Stein lecture in perpetuity.
Anyone? Bueller?
NO! This certifies the hatred of the entire segment by the B&B. Therefore it must be true.
“the B&B” Bath and Beyond? Yes, you have to watch out for those nefarious cretins.
It’s called “confirmation bias”. See Also: clickbait.
I was thinking something similar. Another thing to think about is that less than 5% of people buying cars, new or used, really give a crap about the resale value of the vehicle. The remaining 95% are only thinking about how they are going to pay for it, how they will look in it and if it will fit into their lifestyle. Not even the people that are leasing the vehicle really care about the residual value, just get them to their payment and they’ll be happy.
>> Not even the people that are leasing the vehicle really care about the residual value, just get them to their payment and they’ll be happy.<<
But the lease payments have to be based on residual value – cars w/ better residual value can offer better lease payments w/o taking a loss. Leasing at a loss is not a sustainable business model – even for Nissan, especially for Nissan considering they were already saved from bankruptcy once.
No they don’t. Manufacturers are perfectly happy to use fantasy residuals (and or zero to negative interest rates) to move the metal. And these little turds have SO much profit baked into them at MSRP… Pay us now, we will deal
with the consequences later, if any.
But count me amoung those who thinks that depreciation based on MSRP is less than meaningless. ATP is all that matters. The ones that depreciate the most are the ones that were discounted the most, and vice-versa, with very rare exceptions.
What? Fantasy residuals, Negative or zero interest rates on leases? How many leases have you written up and compared the balance sheet at the end of the night when you close out your board?
So much profit at MSRP? When was the last time you bought and floor planned a monthly inventory? Manufacturers don’t sell their cars for MSRP, and dealers rarely do in this day and age either.
But I will agree that a majority of the time when a manufacturer has a rebate on a current year model, it does effect the current book values of the earlier year, same model cars. However, those numbers also go up later if the rebates go away or that vehicle becomes more popular.
I’m talking about the manufacturer’s profit, not the dealers. There is no way that CUVs cost anything like the difference in MSRP over the hatches/sedans they are based on to manufacture. If you want to base it on invoice price instead, so be it, same thing. Lots of room for that cash on the hood as necessary, whether above board or via the in-house bank as the Germans love to do.
I am talking about the person that is leasing the car, not the bank.
As long as you can get to the payment, the customer is happy. Very few people actually buy the lease out in the end. If they do, then those are the people that will consider the residual, but again, that is rare.
But when considering the banks, they pretty much know how to set the lease payments so that they don’t lose a lot of money. If the residual is low, then the payments will reflect that. This is why new models have such high payments when you compare a similarly priced existing model of the same brand. Take a Toyota 2018 Corolla and CH-R. In November of ’17, My wife wanted a new car. At that time I negotiated a lease payment for the Corolla SE of $190, but the CH-R was around $380. Both MSRP in the $22k range.
But contrast that to a full year that the CH-R has been out and now they are quite similar. The CH-R is $189 w/ $3k down and the Corolla is also $189, but with only $2,700 down.
So as we can see, the first year the manufacturers bank, as well as other banks don’t know what will happen to the residual value at the end of the lease.
The other option is to get a Rav-4 for only $199 with $3k down.
So for only $10 a month more, you can get a RAV-4 instead of the CH-R, which in reality is a Corolla hatch.
Difference in MSRP and Lease End Purchase/Proposed Residual Value for the three 2018 vehicles:
CH-R $10,225
Corolla $9,886
Rav $10870
(Unfortunately I don’t have the Buy Out/proposed residual value of the CH-R from last year for comparison.)
Corolla is worth about 12K wholesale in two MYs in clean condition. I’m not sure on three but 9s or less are probably accurate, and considering it will be at least 20K +auto OTD I think that’s fecking sad.
Corolla hatch is actually the JDM Toyota Auris which is being sold as Corolla IM till like MY19 or 20.
Bank set residuals are moot when the competition has $10,000 on the hood.
Black Book is like $500 a year, want to give me your credentials?
Could be in the US. Here in Canada, where we have more European buying tastes a pre-owned HR-V or CX-3 is gold.
I’ve said before, but the average width of a US suburb road compared to an urban city street in Vancouver or Montreal explains in large part the difference between buying trends between US and CDN (we are more tightly clustered into urban centres.) The HR-V looks merely average in Vancouver, but Lilliputian in Southern California.
Are they self-deprecating, like Tom Selleck, or Mark Wahlberg?
If the reason to be for this category is that they offer more space and easier in/egress than their small sedan counterparts, then someone at the manufacturers forgot to build in the additional space and easier in/egress into these things.
I’ve sat in a number of them and each time it was a struggle to get in and out. I found it easier to get in and out of a Focus.
That was the claim for the compact SUV’s, like the RAV4 and CRV. But these smaller ones like the Juke, CH-R, HR-V, CX-3 etc. are basically hatch versions of their sedan platforms. It’s all about perception.
That offer AWD as you see morr AWD of some cuv’s than fwd versions.
There is a surprising lack of room when all seats are up. There is hardly room for a a shopping bag behind the rear seats. I just looked at these at our local auto show.
CUV?-not utility in these things.
Yeah, that 18 cu ft behind a Encore rear seat pales in comparison to the XTS 18 cu ft of trunk space.
If you pay $27K for a Civic hatch on stilts, there is only one direction the price can go (down) and one speed the price can travel (fast). The only exception it seems is Subaru, which trades on love, and a symmetrical all-wheel-drive system that is regarded as marginally better than other all-wheel-drive systems.
I doubt Jeep is helping the segment either. Lots of people are discovering their rugged American SUVs are actually Eye-talian shopping carts that only run after you run your platinum card through the ignition. Values tend to crater shortly thereafter.
TD stats say otherwise. Renegade is quite reliable statistically.
Truedelta has the repair rate at 30-40 repairs per 100 or close to half going back to the dealer for both Fiat 500 and renegade. Not enough stats for 500x.
But that is CR-V territory and terrible!
The magazines are finally in agreement that the CUV that’s been best in class since its class’ inception is actually best in class…just as it falls to GM levels of reliability. Honda is dead. Toyota is the only brand worth buying new now.
What this shows, is that this is a fashion-and-fad-driven market, not a need-driven one. These things are DEPRECIATING (not DEPRECATING) faster because with the new subprime and Liar Loans for just-about anyone, it’s now possible to put someone with a $20,000 job in a $40,000 truck.
That’s not gonna end well; but it’s not as if we haven’t seen it before.
Meantime…in the weater where I live, I’d love to get an AWD CUV at a reasonable price and mileage. Watching more closely, now…
WEATER ??
Glass houses and all…
CR-V EX 1.5T awd is $26K while the Equinox 1.5T awd is $21K on cars dot com. No amount of psuedo residual value is going catch $5,000 on the hood.
Plus you can fold thr front passenger seat for a segment leading 81 cu ft of cargo.
“No amount of psuedo (sic) residual value is going catch $5,000 on the hood.”
Just the residual regret over purchasing a GM product. Some find avoiding that to be worth much more than $5K spread over 48 months.
At least it is not considered a male hair stylist car.
Says who?
If you’re buying a car to win approval of strangers you don’t know and probably wouldn’t like…you’re doing it wrong.
If you want to impress people…put on a Brioni suit, or disco-era skin-tight Levis. If you’re trying to get from Point A to Point B…figure out your needs and buy accordingly.
If you want to WASTE your money…buy a vehicle for social approval.
” if you’re shopping for the truck or SUV, bigger is usually better when it comes to deprecation.”
Fallacy ALERT!
Even thought percentage is less, because gross amount is more, the final bottom line depreciation may be just about the same
While potentially true with some luxury vehicles (although not this week), it’s not the case with full-size SUVs or pickups. Both incurred a lower dollar-value loss in the same time period against subcompact SUVs.
Like you said, “this week” as it depends on what is hot on the market and what tends to need some assistance from the manufacturers in terms of rebates as well as what sits on the used car lots longer and what goes through the auctions at low or high values.
Wait until subcompact CUV EVs come out. They will make an HR-V look like gold.
E.g.: Kia Niro EV would be the trifecta for depreciation – and I’d still consider one.
Sub-sub-compact?
Scion iQ with AWD and an extra inch of ground clearance.
Subcompact crossovers are their own excuse.
Maybe I’ll finally be able to get a well equipped newer Encore for cheap as a city car to drive into NYC with.
Used Encore’s with 100,000 are $8,000, new are $15,000-17,000. Much better to get a new one on a 10,000 mile lease.
Wait, is this saying luxury cars are depreciating slower than others?