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Black Book used vehicle retention index finishes December on a weaker note

Black Book used vehicle retention index finishes December on a weaker note

LAWRENCEVILLE, Ga. – Black Book, a division of Hearst Business Media that provides industry-leading used vehicle valuation and residual value forecast solutions, released its Used Vehicle Retention Index for December, with the Index falling -0.7 percent from 115.0 to 114.1 last month, its first decline in the last four months dating back to August.

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, unbiased view of the strength of today’s used vehicle market values.

After rising for three straight months (Aug. 112.6; Sept. 113.9; Oct. 114.6; Nov. 115.0), the Index fell in December largely due to higher depreciation recorded for both car and truck segments. The 114.1 mark was the lowest tally for December dating back to 2010 when the Index was at 113.3. The used vehicle market began a run of strong retention that year from higher consumer demand and low supply levels, and finished December 2011 with a mark of 123.0.

December saw higher depreciation on a mix of both car and truck segments, led by Full-Size Luxury CUV/SUV (-2.0 percent); Mid-Size Luxury CUV/SUV (-1.9 percent); Full-Size Cars (-1.7 percent); Compact Crossovers (-1.7 percent); and Compact Cars (-1.4 percent).

“While December finished on a slightly down note for the Index, the overall year in 2017 was filled with stronger-than-expected retention rates, mainly due to a continuously health economy and vehicle replacement activity following the major hurricanes,” said Anil Goyal, Senior Vice President of Automotive Valuation and Analytics for Black Book. “We expect to see depreciation rates return to normal levels in 2018, even though the recent tax changes may incentivize some additional spending, particularly during the spring tax season.”

The Index dates back to January 2005, where Black Book published a benchmark index value of 100.0 for the market. During 2008, the index dropped by 14.1 percent while during 2016, the index fell by just 6.4 percent. 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 until May of 2014 when it hit a peak of 128.1.

To obtain a copy of the latest Black Book Wholesale Value Index, please click here.

SOURCE: Black Book press release

 

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About Ronnie Garrett

Ronnie Garrett is the editor in chief of RV Daily Report. She's been a writer/editor for more than 25 years, working in law enforcement, aviation, supply chain and now the RV industry. She's not a stranger to RVs, however. She grew up camping, and still camps as many weekends as she can every year.

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