agent Entrepreneur logo
MenuMENU
SearchSEARCH

NADA: Supply, Incentives Driving Down Retention Rates

MCLEAN, Va. — Through September, retention rates for most model-year 2013 vehicles are down across the board compared to last year, according to NADA Used Car Guide. Larry Dixon, the firm’s director of market intelligence, said increased supply and incentives are the reasons. “We estimate that the supply of used vehicles up to five years ... Read More »

October 12, 2016
3 min to read


MCLEAN, Va. — Through September, retention rates for most model-year 2013 vehicles are down across the board compared to last year, according to NADA Used Car Guide. Larry Dixon, the firm’s director of market intelligence, said increased supply and incentives are the reasons.

“We estimate that the supply of used vehicles up to five years old will jump by 12% this year. This is the biggest increase in more than a decade,” Dixon said. “As for incentives, with new-vehicle sales growth leveling off, manufacturers are dialing up incentives to preserve market share. Per J.D. Power, incentives were up 9% through August to an average of $3,436 per unit.”

Ad Loading...

Only mid-size vans, luxury large utility, sports cars and mid-size pickups retained their average value better this year compared to 2015, according to the report. And, out of those four segments, mid-size pickups held their value the most — holding an average of 67.2% of their value after three years.

Segment Retention Rates

  1. Mid-size Pickup: 67.2%

  2. Half-ton Pickup: 56.5%

  3. Mid-Size Utility: 53.7%

  4. Large Utility: 53.1%

  5. Lux Large Utility: 52%

  6. Sports Car: 51.2%

  7. Compact Utility: 50.7%

  8. Mid-Size Vans: 50.4%

  9. Lux. Sports: 50.2%

  10. Lux. Compact Util.: 50.1%

  11. Lux. Mid-Size Util.: 48.2%

  12. Compact Car: 46.5%

  13. Lux. Subcompact: 45.1%

  14. Lux. Compact: 43.7%

  15. Mid-Size Car: 43.6%

  16. Lux. Large Car: 42.4%

  17. Large Car: 42.2%

  18. Lux. Mid-size Car: 41.2%

  19. Subcompact Car: 37.5%

“Their versatility can’t be matched, and the road manners and fuel efficiency of today’s utility and pickup truck are significantly better than in the past. Availability — or the relative lack thereof — is also helping,” Dixon said in a statement issued to F&I and Showroom.

He added that although the supply of large pickups at auction is up about 28% compared to the year prior, it is still well below the pre-recession highs. Additionally, the relatively low price of gas, and the forecast of cheap gas to come is adding to the appeal of pickups.

However, while low gas prices are acting as a boon for pickups and utilities, it’s acting as a bane for subcompacts. The NADA Used Car Guide found that the subcompact segment retained its value the least out of all segments — 37.5% of its value after three years — and also realized the worst retention rate decline out of all segments — vehicles in the category dropping 7.2% in value compared to the year before.

Dixon said that the main reason for the decline in subcompact car retention is similar to the reason the industry as a whole is seeing declines in value retention: increased supply.

Ad Loading...

“It’s estimated that subcompact volume of vehicles up to five years old will grow by 20% [or more] this year, more than the vast majority of other segments,” Dixon said. “We’ve seen auction volume for the segment grow at a similar rate so far this year, 22%.”

Retention Rate Change From Year to Year

  1. Subcompact Car: -7.2%

  2. Large Car: -4%

  3. Compact Util.: -3.4%

  4. Lux. Subcompact: -3.2%

  5. Compact Car: -2.6%

  6. Lux. Compact: -2.5%

  7. Lux. Mid-size Util.: -2.2%

  8. Lux. Mid-size Car: -1.9%

  9. Lux. Sports: -1.9%

  10. Mid-Size Car: -1.6%

  11. Large Util.: -1.4%

  12. Half-Ton Pickup: -1.2%

  13. Lux. Compact Util.: -0.9%

  14. Lux. Large Car: -0.4%

  15. Mid-Size Util.: -0.3%

  16. Mid-Size Vans: +0.3%

  17. Lux. Large Util.: +1.5%

  18. Sports Car: +1.6%

  19. Mid-Size Pickup: +4.7%

While the average retention rates for the other car segments — compact, mid-size, large, luxury subcompact, luxury compact, luxury mid-size, and luxury large — were all below the larger utilities and pickups, their rates were noticeably better than subcompacts. At the low end were three-year-old luxury mid-size cars with a retention rate of 41.2%. At the high end were compact cars with a retention rate of 46.5% after three years.

Dixon also noted that while the subcompact segment is struggling, the luxury subcompact is holding its value much better than its non-luxury counterpart. In fact, the luxury subcompact segment is holding its value better than every other luxury car segment — the one exception being luxury sports.

The reason being is that luxury subcompacts are a less mature segment with less competition, Dixon noted. The segment, he added, also facilitates entry into the luxury sector because of the segment’s relative affordability vs. larger luxury vehicles.

More Industry

Group photo of men outside storefront.
Industryby Hannah MitchellMay 28, 2026

Pennsylvania Dealership Under New Retailers

The sale of the Chrysler Dodge Jeep Ram store puts a family auto group on a leaner path as first-time dealers take the helm.

Read More →
Hallway with lockered wiring and computer
Industryby Lauren LawrenceMay 28, 2026

Battery Storage Takes Priority Over EVs

U.S. automakers are prioritizing battery energy stationary storage over electric-vehicle production as the consumer demand for EVs lags the rest of the world.

Read More →
Gray-scale photo of a line of Mini cars in a dealership parking lot
Industryby Hannah MitchellMay 27, 2026

Auto Dealers Feel Better But Not Great

A second-quarter Cox Automotive poll of franchised retailers and independents found better views of the current market after a good spring but anticipation of third-quarter storminess.

Read More →
Ad Loading...
Closeup photo of the front of a white car
Industryby Hannah MitchellMay 21, 2026

New-Vehicle Sales Picture Relative

A May forecast is complicated by last spring’s trade tariff effects on auto retail. Despite continued hard realities, many consumers took advantage of ways to bite the bullet.

Read More →
Nissan logo on front of building
Industryby Lauren LawrenceMay 21, 2026

Auto Group Acquires Third Nissan Rooftop

Iowa-based Coleman Automotive Group recently acquired its seventh dealership, McGrath Nissan, which it renamed Nissan of Elgin.

Read More →
Couple talking with auto salesman next to new car inside dealership
Industryby Hannah MitchellMay 20, 2026

April Less Affordable

Based on prices, reduced incentives and slower household income growth, consumers found it more challenging to buy new last month, Cox Automotive reported.

Read More →
Ad Loading...
Wooden people figures of different colors in a row, similar to board game pieces
IndustryMay 20, 2026

Building an Extraordinary F&I Agency

Work to determine your specialized talent, because that fact will determine everything about your agency’s future.

Read More →
Ingredient card, policies and procedures, fixed operations, variable operations, data security, audit
Industryby Jim GantherMay 19, 2026

Recipe for Compliance

The secret to both amazing barbecue and compliance is the same: understanding the basics and committing to a process.

Read More →
Photo of new Chevrolet Bolt parked on a beach
Industryby Hannah MitchellMay 14, 2026

EVs Getting More Attractive

A growing percentage of U.S. consumers are open to switching and fewer are adverse to the idea, according to a recently completed survey. That’s despite the end of a tax break.

Read More →
Ad Loading...
Benchmark bar graph showing April 2026 EV Sales
Industryby Lauren LawrenceMay 14, 2026

EV Sales Drop in April Following Surge

North American electric-vehicle sales were down 28% year-over-year, a sharp contrast from global EV sales growth of 6%.

Read More →
Ad Loading...