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Used vehicles hold their value
By Insure.com staff

Used-car prices will remain relatively stable in the next few years after several years of volatility, according to a new report from the NADA Used Car Guide.

Depreciation is expected to increase modestly, but still remain at historically low levels.

"The expected low annual rate of depreciation can be attributed in part to the continued decline in the supply of late-model used vehicles, which was caused by a substantial reduction in new-vehicle sales during the economic recession," Jonathan Banks, senior analyst with the guide, said in a press statement.

This follows a few years of widely fluctuating used-vehicle prices. A used vehicle worth $12,000 fell in value by as much as $3,180 in 2008 and by just $1,332 in 2009, according to NADA's report, "Volatility in Used Vehicle Depreciation: Historical Trends & Future Outlook."

In 2012, NADA predicts a $12,000 used vehicle will depreciate in value on average by $1,884 or 15.7 percent -- much slower than the annual 21.4 percent rate of depreciation from 1996 to 2008.

Late-model used vehicles are holding their value longer because of improvements in vehicle quality, reliability, design and fuel efficiency, Banks said.


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