Black Book, a division of Hearst Business Media that provides industry-leading used vehicle valuation and residual value forecast solutions, announced its latest Used Vehicle Retention Index figures, with the index listed at 113.0 at the end of March, a 0.8% decrease from the previous month’s mark of 113.9. Click here to obtain a copy of the latest index data.
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. The Index offers an accurate, unbiased view of the strength of today’s used wholesale market values.
Rising interest rates and auto loan delinquencies have led to a slight tightening of credit availability. Incentives also continue to increase, and CPO growth has continued to slow all creating downward pressure on retention values, resulting in a continued easing downward of the monthly Index. The index is weighted based on vehicle registration volume and adjusted for seasonality, vehicle age, mileage, condition, and inflation (MSRP).
Two individual segments showed significantly higher drops according to their Index calculations on the month: Sub-Compact Cars fell -2.2%; and Compact Crossovers fell -1.6% during the month of March.
“We are continuing to see that the market is steadily declining, and a typical four-year-old vehicle is not retaining the same value over time,” said Anil Goyal, Senior Vice President of Automotive Valuation and Analytics for Black Book. “Given the direction of supply, demand, incentives and interest rates, we feel this easing downward trend for the Index will continue throughout the balance of 2017.”
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% while 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 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 steadily since May 2015, when the Index registered a score of 125.9. This recent trend illustrates a continued, slow, weakening of the used-vehicle market as a result of cresting demand and increased supply in the used market.
To obtain a copy of the latest Black Book Wholesale Value Index, please click here.
About Black Book
Black Book® is best known in the automotive industry for providing timely, independent and accurate vehicle pricing information, and is available to industry-qualified users through products and licensing agreements. Black Book data is published daily by National Auto Research, a division of Hearst Business media. For more information, please visit BlackBook.com or call 800.554.1026.