Great Value in Used Cars from Off-Lease Inventory Drives Monthly Increase That Eclipses Last Year’s Hurricane-Fueled Replacement Activity
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 August, with a significant month-over-month increase of +1.4%. The change last month marks the largest single-month increase since the +1.7% increase in May, 2011, and is larger than the hurricane-fueled increase of +1.2% in September of 2017. Click here to obtain a copy of the latest index data.
What’s noteworthy for this month’s Index report is that while cars overall and most individual car segments see continued declines in market share, used Mid-Size Car sales have seen an increase in market share during 2018. Furthermore, helping the Index increase the most were Compact and Mid-Size Cars and SUVs, with increases in retention ranging from 1.3% to 1.6% over the prior month. Minivans, Full-Size Cars, and Luxury Cars also saw sizable increases in retention (up to 1.9% increase over the prior month); but had less impact overall due to their smaller segment size.
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.
“No doubt, many sedan segments in the used market are defying expectations this summer, with demand increasing due to the improving job market and more consumers seeking affordable personal transportation,” said Anil Goyal, Executive Vice President, Operations. “August is usually a down market from a seasonal perspective. With nominal used car values going up at this time of the year, the seasonally-adjusted Black Book Retention Index registered a strong lift.”
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.