Black Book’s representative watching a sale in California as November closed shared this observation: “The most common complaint from the dealers was the continued high prices paid to secure inventory.”
Reinforcing that dealer claim is the fact that Black Book’s Used Vehicle Retention Index climbed for the seventh month in a row. The November reading came in at 116.5, marking an uptick of 0.2 percent.
The index has been on a steady march higher since Black Book placed its May reading at 112.0. Editors pointed out that the only time this year that the index has moved lower came back in March when the reading dropped to 112.0 from 113.3 registered in February.
Black Book also highlighted the segments with the highest month-over-month gains in the retention index included:
• Midsize luxury crossover/SUV: up 0.8 percent
• Subcompact car: up 0.6 percent
• Midsize car: up 0.5 percent
• Premium sporty car: up 0.5 percent
• Luxury car: up 0.4 percent
“Cars and sedans continue to outperform many truck segments in the index, as many used car models offer great value for shoppers looking for affordable alternatives to new cars that are offered at high sticker prices with increasing interest rates,” said Anil Goyal, executive vice president of operations at Black Book.
“December is always an interesting month as aggressive deals are offered to reach year-end sales goals, but by January we will again begin to prepare for the spring tax-selling season,” Goyal continued.
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. 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. 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, go to this website.
Latest weekly movements
Black Book arrived at its latest index reading after analyzing the last week of auction activity conducted in November.
The most recent installment of Market Insights from Black Book showed that values are softening even if the index has yet to show it.
Editors indicated that their volume-weighted data showed overall car segment values dipped by 0.64 percent last week. That pace is slightly higher than what they witnessed during the previous four weeks as Black Book watched car values decrease by 0.56 percent on average.
Among cars, Black Book noticed the compact car segment experienced the biggest drop, sliding by 0.77 percent or $60.
Looking again at volume-weighted information, editors found that overall truck segment values (including pickups, SUVs and vans) dropped by 0.79 percent last week. That rate is almost double what Black Book recorded during the previous four weeks when truck values declined by 0.42 percent on average.
In the truck space, editors determined the full-size crossover/SUV segment sustained the most significant drop, falling by 1.19 percent or $261.
Beyond what a lane watcher stationed in California shared, Black Book observers passed along anecdotes that might reflect a similar scene at the sale you most frequent. The rundown included:
— From Florida: “We are having more no-sales, but the overall market remains fairly steady for late fall.”
— From Wisconsin: “Dealer attendance was good, as was the bidding and selling.”
— From Indiana: “The market is a little sluggish, but anything in clean condition continues to sell.”