Motus: Vehicle depreciation to slow as much as 3% in 2021

If you think vehicle prices are high in 2020, just wait ‘til next year.

According to the 2020 Vehicle Depreciation Trends Report released by Motus last month, 2021 is likely to see depreciation rates slow between 1% and 3% throughout the year, assuming current trend lines remain in play.

As you might expect, the current and forecasted high vehicle prices are being driven largely by pandemic-related impacts. When automakers shut down production this spring, Motus explained, that led to a new-vehicle shortage.

But demand remained strong.

And subsequently, used-vehicle supply took a hit, as well.

“The pandemic has decimated vehicle inventories, and consumer demand has remained surprisingly steady. It’s no surprise we’re seeing premium prices on both new and used automobiles,” Ken Robinson, market research manager at Motus, said in a news release.

“New-vehicle prices and residual values both influence depreciation and both have been impacted by the pandemic. If supply and demand trends in motion remain consistent, we predict that depreciation will decrease by 1-3% over the course of 2021.”

In the full report, Motus said: “New-vehicle prices and residual values both influence depreciation. Both have been influenced by the pandemic. Assuming consumer demand remains steady, we expect the tight supply of new vehicles to mostly offset the increased used-vehicle inventory entering the market.”

For more on Vehicle Depreciation Trends Report from Motus, listen to our podcast below with Robinson.