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Credit FAQ: How Lower Residual Values Affect U.S. Auto Lease And Loan Securitizations Aug 08
Standard & Poors, August 2008
As retail gas prices steadily increased during the first six months of 2008, U.S. consumers' demand for sport utility vehicles (SUVs), pickup trucks, certain crossover utility vehicles (CUVs), and low miles-per-gallon (MPG) sedans (collectively, low-MPG vehicles) fell considerably. This resulted in an unprecedented and rapid decline in the secondary market prices of these vehicles. Manheim Consulting reported mileage-adjusted declines in used-vehicle prices for large SUVs and pickup trucks of 28% and 25%, respectively, for the 12-month period ended June 30, 2008. From March 2008 to May 2008, these prices dropped by 10% and 12%, respectively. (Listen to the related podcast titled, "How Residual Values Are Affecting The Auto Leasing Industry," dated Sept. 22, 2008.) This swift price decline for used...
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