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Spring Car Shopping Demand May Be Smaller Due To Lower Tax Refunds

Vehicle pricing analyst firm, Black Book, believes there may be slightly lower demand for car shopping this spring due to lower tax refunds issued to Americans. Spring is typically among the busiest times of the year for car shopping since many people wait for their tax rebate check to go out and replace their aging vehicle.

 

Last year, the spring tax refund season was a catalyst that led to some of the strongest demand for used vehicles since the recession ended in 2010. In fact, according to Black Book, vehicles depreciated just -12.7% in 2019 compared with -14.5% in 2018. For context, average pre-recession annual depreciation on vehicles is between -15% to -18%.

 

From The NY Times:

The tax overhaul that took effect last year promised relief, but now that returns are being filed, some people are baffled. They’re getting smaller refunds — or sometimes having to write a check — even though nothing in their situation seems to have changed.

 

The average refund among early filers was down 8.4 percent, according to the Internal Revenue Service. The smaller checks, in some cases, stem from the loss of certain deductions. For others, it’s because less money is being withheld from their paychecks. The I.R.S., in trying to more closely match the amount held out of paychecks with the amount that taxpayers will owe, changed its withholding tables.

 

Vehicle Depreciation by Segment:

 

Mk/Mod

 

 

2/1/18

1/1/19

 1M Chg 

2/1/19

 3M Chg 

 12M Chg 

Count

Category

Seg

$

$

%

$

%

%

 

 

 

 

 

 

 

 

 

SUMMARY

 

 

 

 

 

 

 

 

1,572

All Vehicles

 

16,270

14,625

-2.9%

14,207

-7.8%

-12.7%

 

 

 

 

 

 

 

 

 

TYPES

 

 

 

 

 

 

 

 

855

Car

 

12568

11353

-3.1%

11000

-8.5%

-12.5%

717

Truck

 

19996

17918

-2.7%

17434

-7.4%

-12.8%

 

 

 

 

 

 

 

 

 

ORIGINS

 

 

 

 

 

 

 

 

180

Domestic Car

 

11653

10744

-3.2%

10403

-9.1%

-10.7%

319

Domestic Truck

 

20278

18180

-2.3%

17754

-7.3%

-12.4%

675

Import Car

 

13043

11668

-3.1%

11309

-8.2%

-13.3%

398

Import Truck

 

19572

17525

-3.3%

16953

-7.4%

-13.4%

 

 

 

 

 

 

 

 

 

SEGMENTS

 

 

 

 

 

 

 

 

16

Sub-Compact Luxury CUV

LXU

18482

16160

-4.2%

15488

-7.0%

-16.2%

80

Mid-Size Luxury CUV/SUV

LMU

24958

21462

-3.9%

20625

-7.6%

-17.4%

110

Compact Crossover/SUV

CSU

13771

12597

-3.7%

12129

-8.3%

-11.9%

86

Sporty Car

SPC

13834

12792

-3.7%

12324

-9.1%

-10.9%

164

Near Luxury Car

NLC

18328

15523

-3.7%

14955

-9.0%

-18.4%

18

Sub-Compact Crossover

SXU

12092

11730

-3.6%

11305

-5.9%

-6.5%

16

Small Pickup

SPT

22830

21212

-3.5%

20471

-7.9%

-10.3%

29

Minivan

MVW

17219

14521

-3.4%

14023

-10.6%

-18.6%

93

Sub-Compact Car

SBC

7141

6701

-3.4%

6474

-8.4%

-9.3%

138

Compact Car

CPC

9016

8488

-3.1%

8224

-9.5%

-8.8%

49

Full-Size Car

FSC

14138

12886

-3.1%

12489

-8.2%

-11.7%

109

Luxury Car

LLC

24220

20351

-3.1%

19726

-7.4%

-18.6%

60

Compact Luxury CUV/SUV

LCU

23367

20416

-3.0%

19812

-5.9%

-15.2%

104

Mid-Size Car

MSC

10912

10049

-2.9%

9760

-8.6%

-10.6%

53

Prestige Luxury Car

PLC

38936

33139

-2.6%

32286

-6.3%

-17.1%

94

Mid-Size Crossover/SUV

MSU

18345

16003

-2.5%

15605

-8.8%

-14.9%

21

Compact Van

MVC

11565

11225

-2.5%

10947

-5.8%

-5.3%

49

Full-Size Luxury CUV/SUV

LFU

41377

34658

-2.4%

33820

-6.9%

-18.3%

51

Full-Size Crossover/SUV

FSU

29529

25963

-2.4%

25348

-7.5%

-14.2%

59

Premium Sporty Car

PSC

41799

37236

-1.9%

36513

-5.1%

-12.6%

80

Full-Size Pickup

FPT

25967

24152

-1.6%

23760

-5.4%

-8.5%

93

Full-Size Van

FSV

18915

17654

-0.4%

17574

-3.1%

-7.1%

Views: 17

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