LAWRENCEVILLE, Ga. -

Nearly new, late-model vehicles are in high demand, especially by franchised stores with tight new-vehicle inventory because of manufacturing challenges.

Units with much lower actual cash values are wanted, too, as dealers of all stripes cater to budget buyers who got a financial bump via a stimulus or federal income tax refund.

Put the trends together and you have a primary reason why the Black Book Used Vehicle Retention Index set a new record in February.

Black Book reported that its index reading surpassed 130 for the first time, rising 3.4 points or 2.6% from January to land at 132.3.

“We continue to see tremendous strength of used-car prices across all segments,” Black Book senior vice president of data science and analytics Alex Yurchenko said in a news release that accompanied the latest index reading. “Fueled by the shortage of inventory at the wholesale market and issues with new-vehicle production, prices continued to climb in February.

“The full-size pickup truck segment remained strong with its Index increasing by 3.4 points and currently being 23% above its February 2020 level,” Yurchenko continued. The sporty car segment increased by 4.3 points and stands at 21% above 2020 levels.”  

Pushing the index to that record were the price movements analysts spotted during the closing week of February and recapped in Black Book’s weekly Market Insights report.

Overall car prices surged 0.85% compared to the previous week, while overall truck prices climbed 0.60% based on the same comparison.

Other Black Book analysts reiterated the points Yurchenko made about what dealers — whether in the physical lanes or buying through online wholesale outlets — are doing nowadays.

“Sentiments from the retail side are that demand has been sensitive to weather conditions in certain parts of the country, but in general, dealers with inventory under $15,000 are seeing growth in demand,” Black Book said in the Market Insights report. “New dealers are concerned about their new inventory levels and are hoping to supplement their supply with viable used-vehicle substitutes.

“The microchip shortage continues to wreak havoc on new-vehicle production with Ford announcing last week that they will be forced to stop production at multiple facilities in Europe. Full impact of the shutdowns is still unknown, but they hope to have production at normal output by spring,” Black Book went on to say.

Spring certainly seems to be in full swing at the auction, especially when cars move in the lanes.

Black Book indicated a seasonal trend is gaining strength as sporty cars generated the largest car segment price increase a week ago, surging 1.89% after rising 1.09% during the prior week.

Analysts also pointed out that traditional tax season segments — especially vehicles below $10,000 — continue to do well as evident by the 1.75% price climb by subcompact cars.

Black Book added even the near luxury car segment has joined the price-climb movement as it “finally moved into positive territory” with a 0.43% price gain a week ago.

In the truck world, the overall price increase nearly doubled what analysts spotted a week earlier, which was a 0.33% price hike.

“The subcompact crossover segment’s low price point makes it an attractive choice for tax season preparation,” analysts said, noting that prices for these models jumped 1.39% last week.

Prices for full-size trucks continue to climb, too, rising another 0.75% last week after increasing 0.46% during the week prior.

Should wholesale prices maintain this pace, Black Book might be reporting another index record in March.

The Black Book Used Vehicle Retention Index is calculated using Black Book’s published wholesale average value on 2- to 6-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 dates 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% 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 2014 when it hit a peak of 128.1. 

To obtain a copy of the latest Black Book Wholesale Value Index, go to this website.