Vehicle price retention to ‘weaken’ in 2016
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GAINESVILLE, Ga. –
As supply continues to grow, with over 800,000 off-lease vehicles expected to enter the remarketing cycle next year, average vehicle price retention is expected to weaken in 2016.
While 2014 to 2015 had some of the strongest vehicle retention in recent memory, this trend will start to reverse beginning next year, according to a report from Black Book.
Take a look at these numbers from Black Book data:
When the economic downturn hit, three-year average vehicle retention was at 38.7 percent in 2008 and 40.6 percent in 2009.
From there, retention levels have consistently grown through this year as leasing and new-car sales fell off during the Great Recession, causing short supply and putting upward pressure on used prices.
Retention hit a high point in 2014 and 2015, with average retention sitting at 51.2 percent. But this is likely the last year we will see this trend play out.
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In 2016, Black Book expects retention to drop to 48.8 percent, further lowering to 45.9 percent in 2017. In 2018, Black Book’s editors are predicting a rate of 43.6 percent retention.
