STAMFORD - Though used-vehicle supply growth is expected to lead to a softening of residual values in the coming years, pre-owned prices were still on the way up as 2015 came to a close.

According to the latest RVI Risk Outlook newsletter, used-vehicle prices, after being adjusted for MSRP, showed an increase of 1.9 percent in November from the prior month, reported Auto Remarketing.

That said, prices were still down from 2014 highs. November used prices represented a year-over-year decline of 1.6 percent.

Almost every segment RVI tracks saw prices increased during November. But on a year-over-year basis, the larger, more expensive vehicles have performed better, RVI analysts point out, while small economical vehicles have lost value in a market where oil prices continue to drop.

For example, residual values in the subcompact segment were down by 9.5 percent year-over-year in November. In comparison, segments like the small SUV segment are seeing prices hold strong, with prices up 0.3 percent in November. According to the report, low gas prices and a low supply of small SUVs have helped keep values strong.

“While the supply of small SUVs has remained low over the past several years, this is expected to change dramatically starting in 2017,” the report stated, with prices expected to drop for the segment by 5.7 percent by 2018.

And the small SUV segment won’t be the only vehicle category feeling the impact of expanding supply.

In fact, RVI analysts expect used prices to fall by 4.9 percent from current levels by 2018. Part of this expected increase is due in part to an expected influx of off-lease vehicles entering the used market.

And leasing penetration continues to soar. During the third quarter of 2015, lease penetration was at 22.4 percent, up from 20.7 percent in Q2 and 19.9 percent in Q3 of 2014. And through the third quarter of 2015, the lease penetration rate for the year sat at 21 percent of total new vehicles sales. RVI analysts pointed out lease penetration has not been this high since the early 2,000s. In other words — get ready for some serious expansion in used supply in the coming years.

“A growing supply of used vehicles will lead to a softening of residual values. RVI forecasts an increase in leasing through 2018 and a growing supply of used vehicles in the market through 2020,” the report stated. “In particular, the growth in lease penetration will contribute to the supply of used vehicles as off-leased vehicles will begin to enter the market.”

RVI analysts explained they also anticipate an increase in competition in the auto industry, which will also play a role in pushing used prices down.

“The level of incentives spending will increase due to these changing dynamics. Increased supply, greater competition, and higher incentives will contribute to a decline in residual values,” the report concluded.