BLACK BOOK USED VEHICLE RETENTION INDEX CONTINUES TO INCREASE BUT AT A LOWER RATE

Seasonal Depreciation Patterns Appear; May Signal the Last Positive Change of 2018

 

Black Book, a division of Hearst that provides industry-leading used vehicle valuation and residual value forecast solutions, released its Used Vehicle Retention Index for October (116.3), a +1.5% increase over the last twelve months (114.6) and a +0.2% change since September (116.0). Click here to obtain a copy of the latest index data.

October’s used vehicle retention activity may have represented the last positive change of the 2018 campaign, as seasonal depreciation patterns began to take hold throughout the month. Cars especially saw their run of positive changes begin to lose steam, with strong retention trends that persisted throughout much of the year. While most truck segments performed slightly better than cars, they still saw depreciation accelerate during the month. The segments that saw the most strength and weakness for the October index are:

The segments with the highest month-over-month gains in the Retention Index were:

  • Compact Crossover/SUV: +0.95%
  • Sub-Compact Car: +0.88%
  • Mid-Size Luxury CUV/SUV: +0.53%

While the segments losing the most were:

  • Full-Size Luxury CUV/SUV: -0.81%
  • Premium Sporty Car: -0.46%
  • Small Pickup: -0.45%

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.

“This Index data can be especially valuable this time of year because it is designed to give automotive professionals and portfolio managers an analytical look into the trends driving segment performance across cars and trucks,” said Anil Goyal, Executive Vice President, Operations. “Particularly as we begin to close out the year, it’s important to leverage the Index data and related residual forecasts as dealers and lenders begin to look at their inventory and portfolio makeup, and whether to increase or decrease in any particular segment, and what they want that to look like heading into 2019.”

The Index dates 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 fell by just 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 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

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 online subscription products, mobile applications and licensing agreements. Since 1955 Black Book has continuously evolved to ensure that it achieves its goal of delivering mission-critical information to its customers, along with the insight necessary to successfully buy, sell, and lend. Black Book data is published daily by National Auto Research, a division of Hearst, and the company maintains offices in Georgia, Florida, and Maryland as well as the Canadian Black Book in Toronto. For more information, please visit BlackBook.com or call 800.554.1026.

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