The first rendition of the Black Book Used Vehicle Retention Index for 2018 showed the wholesale market is heading into traditional cyclical pattern going into the spring.
On Monday, Black Book released the January index, which registered in at 113.1, marking a dip of 0.9 percent from the previous month. The December reading came in at 114.1.
Editors pointed out that the Index has now softened by 1.2 percent during the past 12 months.
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.
Entering February, Black Book noted the market appears to be reaching typical depreciation levels following a few months of post-hurricane activity in the third and fourth quarters.
According to Black Book, overall the market is experiencing a 1-point decline, fairly uniform across roughly all segments, with near luxury cars pacing the biggest decliners at 1.8 percent and luxury cars close by at 1.6 percent.
“As we ended last year on a strong note with used vehicle values getting a lift due to hurricane replacement activity, we expected we a larger decline in January,” said Anil Goyal, Black Book’s executive vice president of operations, in the analysis.
“We anticipate stability in the Index values over the next couple of months as the spring selling season gets underway, and consumers shop with an appetite driven by the recent tax changes approved,” 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. 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 Used Vehicle Retention Index, go to this website.