Black Book’s latest wholesale observations — both its Used Vehicle Retention Index for December as well as its Market Insights report recapping the opening week of 2019 — highlighted softening prices, reinforcing what one auction told editors that tax season might be “more of a myth than a reality.”

Beginning first with the December Used Vehicle Retention Index, Black Book reported the reading came in at 116.3, dipping slightly from the previous month’s mark of 116.5. December showed the first decline in the index dating back to May.

Editors noted that the Used Vehicle Retention Index finished the year up by 1.9 percent compared with 2017. It was the largest year-over-year increase for the Index dating back to 2012, when the index climbed 3.5 percent compared with 2011.

Black Book peeled out notable gains and losses in retention from its latest index analysis, including:

Gains
• Midsize car: up 0.55 percent
• Midsize luxury CUV/SUV: up 0.31 percent
• Compact luxury CUV/SUV: up 0.29 percent

Losses
• Minivan: down 1.6 percent
• Full-size luxury CUV/SUV: down 1.54 percent
• Full-size van: down 1.3 percent
• Midsize crossover/SUV: down 1.14 percent
• Premium sporty car: down 1.02 percent

“The segments showing the greatest gains and declines in the Index this month were a mix of car and truck segments,” said Anil Goyal, Black Book’s executive vice president of operations. “This is certainly the time of year when we see declines ahead of the spring selling season.

“However, the decline in December was higher than typical seasonality, thus a slight decline in the index,” Goyal continued. “Given the current economic conditions, demand for used and new vehicles remains strong but there is a cloud of uncertainty as we start 2019.”

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.

Activity during first week of 2019

Black Book’s Market Insights report showed the prices of cars declining more than trucks to begin 2019.

“In the first week of the new year, values of used vehicles continued to decline on pace with the trend seen in December. The previous year ended with the lowest depreciation rate in three years,” Goyal said.

Volume-weighted, editors noticed that overall car segment values decreased by 0.69 percent last week. In comparison, the market values softened by 0.64 percent on average during the prior four-week period.

Among the car segments, Black Book mentioned the full-size car (down 1.10 percent), sub-compact car (down 1.12 percent), and luxury car (down 0.95 percent) segments experienced the biggest price drops.

Again volume-weighted, editors determined overall truck segment values (including pickups, SUVs, and vans) dipped by 0.54 percent last week. That’s nearly on par with the previous four week as the market values for these units dipped by 0.55 percent on average.

And in the truck segment, Black Book reported that the sub-compact luxury crossover (down 1.10 percent) and full-size luxury crossover/SUV (down 0.80 percent) segments performed the worst.

Black Book's report also included anecdotes editors collected from the lanes. The first one came from an auction owner in Pacific Northwest.

“Cautious optimism is the theme for me. I believe things will ramp up a bit right away, while slowly gaining momentum. 2019 will be better than last year for used vehicles. The ‘tax season’ feeding frenzy is now more of a myth than a reality,” the owner told Black Book.

Editors shared the views from a wholesale buyer in Texas, as well.

“Bought several vehicles online and the floors have definitely been adjusted,” the buyer told Black Book. “On some $40,000 vehicles they were down close to $1,000 from the mid-December floors. I buy for several new-car stores and I can tell you that retail is flat here in the Southwest. I am buying mostly trucks and SUVs as the low fuel prices have kept them hot.”

Update on the specialty markets

And as they do at the top of each month, Black Book editors describe conditions within the specialty spaces. Here is their rundown:

— Collectibles: Although most enthusiasts are anxiously awaiting the collectible car “super week” that happens in Scottsdale, Ariz., this month, Black Book insisted that observers shouldn’t forget that Mecum is hosting a major auction in Kissimmee, Fla., through Jan. 13.

— Recreational Vehicles: As we move further into winter, Black Book indicated RVs are continuing to exhibit typical seasonal behavior. “Both towables and motorized units are down slightly this month, but their rate of decline has slowed,” editors added.

— Powersports: Black Book noted that the Powersports market is down as we enter 2019. “Nearly all segments see declines in value, with the off-road bikes taking the biggest hit this month,” editors said.

— Heavy duty: Editors indicated: “Trucks are moving in and out of service faster and we will be watching to see how much wholesale values are affected.”

— Medium duty: Black Book closed discussion in this space by stating wholesale prices continue to stabilize as demand grows for units in these segments to satisfy regional delivery and construction needs.