While edging lower on a sequential basis, Black Book’s Used Vehicle Retention Index for March came in higher than a year ago, reflecting how the ongoing spring market has behaved.
On Tuesday, Black Book released its index for March, and the reading stood at 113.8, representing a 0.6% dip from February when it was 114.5. Editors pointed out the index is 1.7% higher than where it was a year ago when the reading sat at 112.0.
Black Book explained the index has reflected a late start to the spring selling season, dropping each month since November. Editors noticed SUVs and luxury vehicles showed the largest declines in March with minivans, compact and midsize cars, as well as small pickups having modest gains.
Black Book executive vice president of operations Anil Goyal pointed out that market-share changes reflect a continued shift away from cars and toward more SUVs and pickups.
“While the economy continues to expand, higher supply of used vehicles and affordability issues have continued to become headwinds for the industry,” Goyal said.
“The spring market is expected to provide a quick jolt to the market during April, but we expect the Index will feel the effects from slower retail demand of new vehicles that could lead to higher incentives,” he 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 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 this website.