Director of Residual Value Solutions
ALG expects used market values to decrease by 4% to 5% over next 12 months on overall industry average partially driven by used market demand softening relative to new market demand; Low levels of used supply have so far been counteracting expected impact from weaker demand.
Looking 2–3 Years Ahead, ALG Sees Used Values 8–10% Lower than Current Prices:
Combination of reduced demand and rising supply in used market is expected to add pressure on used market prices going forward.
Long-Term Outlook on Residual Values:
ALG believes used market values will further soften and decrease during next few years, lowering residual values.
ALG’s 24-Month and 36-Month Residual Outlook:
24-month down 4 ppts (of MSRP) from current used market value of 2-year-old vehicles, and 36-month down 5 ppts lower than actual 36-month auction returns at industry level.