Used-car values will start to drop in 2018, Charles Jones, head of dealer financial services at SunTrust Banks Inc., predicted at the Auto Finance Summit last week.
“The reality is that all of us, as an industry, have been wrong,” Jones told attendees, referring to industry-wide past predictions that values would have dropped by now. “I think you’ll see some easing in 2017; I don’t think it can stay as high as it’s been. But my guess is — I’ll just go out on a ledge — 2018 is probably when you’ll start to see performance plateau.”
Values have to come down at some point, he said, but for now he’s “kicking the can down the road.”
Vehicles coming off lease are likely driving demand in the space, elaborated Duane Freeman, senior vice president of consumer vehicle lending and national sales executive at Bank of America Dealer Financial Services.
“New cars are getting more expensive, not less expensive,” Freeman said. “That payment gap continues to widen, whereas it’s much lower on used-car financing — that’s driving demand.”
