U.S. used truck prices drop again, adding to leasing pressure

U.S. prices for used large pickup trucks and sport-utility vehicles tumbled again in July, adding to pressure on automakers and other lease providers, according to Manheim Consulting.

Wholesale auction prices averaged $10,187 last month for large SUVs, down 26 percent from a year earlier and 1.7 percent from June, the Atlanta-based provider of
used-vehicle data said. Big pickups averaged $8,825, a drop of 20 percent from a year earlier and less than 1 percent from the previous month.

Such declines “suggest increasing risk for auto finance companies,” Wachovia
Capital Markets analyst Richard Kwas said in a note today.

The lower prices paid for the light trucks are cutting earnings at automakers’
finance units and other companies that offer vehicle leases. Demand for large pickups and SUVs has weakened as gasoline has stayed near $4 a gallon. Manheim’s figures are considered a measure of prices automakers may expect for vehicles coming off leases, known as residual value.

Chrysler LLC’s finance arm stopped providing leases Aug. 1. GMAC LLC, the finance company 49 percent owned by General Motors Corp., halted such contracts with incentives in Canada the same day. GM and Ford Motor Co. in the second quarter wrote down the value of their leases by a combined $4.1 billion and are tightening standards for the agreements.