LAWRENCEVILLE, Georgia – Black Book, a division of Hearst that provides industry-leading used vehicle valuations and residual value forecast solutions, released its Used Vehicle Retention Index for March 2022. The Index decreased to 187.7, a 5.3-point (or 2.8%) dr op. The Index currently stands 33% above where it was at the same time in 2021 and 64% above March 2020 (just as the pandemic started).
“In March, we saw another decline of wholesale prices in all but two (Full-Size and Compact Vans) 2-8-year-old vehicle segments that comprise of Black Book’s Retention Index. In pre-COVID years, we would have expected the market to gain strength across many segments by the end of March as dealers were accelerating their tax-season buying,” said Alex Yurchenko, Chief Data Scie nce Officer at Black Book. “So far, only a few segments showed increases (e.g. Compact Car and Compact Crossover) due to tax season and elevated gas prices.
“The spring tax season is usually strongest for cheaper vehicles, but with wholesale values reporting a record 28.7% increase in 2021, dealers are having to look at even older model years to purchase in the “sweet spot” for their tax season shoppers – we observed overall market price increases for 8-16-year-old vehicles.
The main uncertainty remains on the demand side of the equation: raising interest rates, low consumer confidence, the Russian invasion of Ukraine, high gas prices, and inflation concerns are the main factors that have a large impact on consumer behavior. Even with supply chain issues still putting the brakes on new vehicle sales and with record low incentives, we are expecting a moderate decline in prices during the next several months.”
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, as percent of original typically equipped MSRP. It is weighted based on registration volume and adjusted for seasonality, vehicle age, mileage, and condition. The Index offers an accurate, representative, and unbiased view of the strength of today’s used vehicle market values.
To obtain a copy of the latest Black Book Wholesale Value Index, click here.