Black Book sees two elements coming together to prop up used-vehicle prices and, in turn, push its Used Vehicle Retention Index higher for the second month in a row.
Black Book recently released its October index and noticed an increase of 0.6 percent month-over-month from 113.9 to 114.6. It’s the second straight monthly increase dating back to August when the reading stood at 112.6.
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 a percent of original typically-equipped MSRP. It is weighted based on registration volume and adjusted for seasonality, vehicle age, mileage and condition.
Black Book explained the last remaining expected replacement activity stemming from Hurricanes Harvey and Irma drove continued vehicle valuation stability and shopping demand during the month of October.
During the month, vehicle segments such as compact crossover SUV (up 1.3 percent), full-size car (up 1.3 percent), full-size crossover SUV (up 1.7 percent) and full-size pickups (up 2.0 percent) were a few of the categories that saw noticeable retention strength due to increased demand during October.
“So far this year, we have seen a very strong performance for used-vehicle value retention, driven largely by the surprising value shoppers found in the affordable smaller cars after spring, and the huge demand resulting from hurricane replacements in the fall,” said Anil Goyal, senior vice president of automotive valuation and analytics for Black Book.
“Looking ahead in the next two months, we expect the market to decline slightly but still end this year with a better-than-expected strength in used vehicle values,” Goyal continued.
The index dates back 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 percent while during 2016, the index fell by just 6.4 percent. 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.
The index 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.