LAWRENCEVILLE, Ga. — Used-vehicle valuation and residual value forecast solutions provider Black Book (div. Hearst Business Media) unveiled its latest Used Vehicle Retention Index figures today. The index listed at 113.1 for April, a slight uptick from March’s value of 113.0.
The Black Book Used Vehicle Retention Index is calculated using Black Book’s published wholesale average value on two- to six-year-old used vehicles. It is represented as a percentage of original, typically equipped MSRP.
Despite the slight uptick in the index, the change is notable given that it hasn’t seen a month-over-month increase of any sort dating all the way back to January 2015, when the index registered 126.8, a slight increase from 126.7 in the previous month.
The month of April saw stronger-than-average vehicle value retention compared to the last few years, particularly among car segments. Traditionally strong spring season segments such as compact and subcompact cars have seen their overall retention strength rise during the last several weeks. Most likely, the previous 12 to 24 months have shown great depreciation for two- to six-year-old vehicles in these segments, and consumers may see great value in their sticker prices this spring, analysts said.
Conversely, on the truck and SUV side, compact crossovers are beginning to see accelerated depreciation over the last several weeks, driven largely by more intrasegment competition between models as well as rising supply, leading to lower prices at auction.
“April saw stronger seasonality trends than what we had been seeing during the last few spring seasons,” said Anil Goyal, Black Book’s senior vice president of automotive valuation and analytics. “There certainly remains a growing concern over rising supply levels, which typically leads to higher depreciation. But with prices on some segments seeing better value, consumers may be more willing to consider used vehicles in some key car segments.”
The Index dates back to January 2005, when Black Book published a benchmark index value of 100.0 for the market. During 2008, the index dropped by 14.1%. During 2016, the index by lost 6.4%. During 2011, the index rose strongly from 113.3 to 123.0 by the end of the year as the economy picked up steam and used-vehicle values rose higher. It continued to remain relatively stable, rising slightly till May of 2014 when it hit a peak of 128.1. That being said, the index has fallen by 5.1% in the last 12 months.
To obtain a copy of the latest Black Book Wholesale Value Index, click here.
Originally posted on F&I and Showroom