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Used vehicle value retention rate ticks upward

Used vehicle value retention rate ticks upward

LAWRENCEVILLE, Ga. — Black Book unveiled its latest Used Vehicle Retention Index figures, with 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, as percent of original typically-equipped manufacturer’s suggested retail price. The index offers an accurate, unbiased view of the strength of today’s used wholesale market values, the release noted.

Despite the slight uptick in the index, the change is notable given that the index 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. Since that time, the index has slowly fallen to the 113.1 level today.

Particularly among car segments, the month of April saw stronger-than-average vehicle value retention compared to the last few years. Traditionally-strong spring season segments such as compact cars and subcompact cars have seen their overall retention strength rise during the last several weeks.

Most likely, the previous 12-24 months have shown great depreciation for 2- to 6-year-old vehicles in these segments, and consumers may see great value in their sticker prices this spring, the release explained.

Conversely, on the truck side, compact crossovers are beginning to see accelerated depreciation over the last several weeks, driven largely by more intra-segment competition between models as well as rising supply, leading to lower prices at auction, it added.

“April saw stronger seasonality trends than what we had been seeing during the last few spring seasons,” said Anil Goyal, senior vice president of automotive valuation and analytics for Black Book. “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 percent while during 2016, the index by lost 6.4 percent. During 2011, the index rose strongly from 113.3 to 123.0 by the end of the year as 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. The index has fallen by 5.1 percent in the last 12 months.

Download a free copy of the latest Black Book Wholesale Value Index.

SOURCE: Black Book press release

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About Greg Gerber

Greg Gerber is a freelance writer and podcaster who has been writing about the RV industry since 2000. He is the former editor of RV Daily Report.

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