Used Vehicle Retention Shows Decline

Jan. 9, 2019
End-of-year seasonality causes index to decline ahead of spring selling season.

Jan. 9, 2019—Black Book, a division of Hearst that provides used vehicle valuation and residual value forecast solutions, released its Used Vehicle Retention Index for December (116.3), dipping slightly from the previous month (116.5). December showed the first decline in the Index dating back to May. 

The Used Vehicle Retention Index finished the year up by +1.9 percent compared with 2017. It was the largest year-over-year increase for the Index dating back to 2012, when the index climbed 3.5 percent compared with 2011.

Notable Gains / Losses in Retention:

Gain:

  • Mid-Size Car +0.55 percent
  • Mid-Size Luxury CUV/SUV +0.31 percent
  • Compact Luxury CUV/SUV +0.29 percent

Losses:

  • Minivan -1.6 percent
  • Full-Size Luxury CUV/SUV -1.54 percent
  • Full-Size Van -1.3 percent
  • Mid-Size Crossover/SUV -1.14 percent
  • Premium Sporty Car -1.02 percent

“The segments showing the greatest gains and declines in the Index this month were a mix of car and truck segments,” said Anil Goyal, executive vice president, operations. “This is certainly the time of year when we see declines ahead of the spring selling season. However, the decline in December was higher than typical seasonality, thus a slight decline in the Index. Given the current economic conditions, demand for used and new vehicles remains strong but there is a cloud of uncertainty as we start 2019.”

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.

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.

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