Canadian Black Book releases its monthly Used Vehicle Retention Index for Canada, covering February, 2019. For
February 2019 the index has seen a decline, for the first time since June of 2018. Will this be the beginning of a broader trend? Only time and Canadian Black Book's index, will tell.
“Someone once said, ‘One month does not a trend make,” which is a shameless derivative of a famous quote from Aristotle, ‘One swallow does not a summer make,’” mentions Brian Murphy, VP Research & Editorial at Canadian Black Book. “This month’s results have very little to do with birds and everything to do with price trends for 2 to 6 year old used cars, SUVs and trucks.”
The index tracks 20 different segments of vehicles, everything from the smallest smart fortwo to the big brute 3500 series pickup trucks. It is a composite of value data from some 9,000 different make model trims. Some variation in the segments is expected and they all behave differently over time. The index is now resting at 104.7 a drop of 0.5 from last month’s record high.
Compared to the same time last year it is the Compact and Sub-Compact cars that have shown the largest gains of 4.9 points and 6.8 points respectively. Since February 2018 it is the luxury cars (-7.8), premium sporty cars (-4.2), and prestige luxury cars (-7.2) that have fallen in value the most. Similar to the rest of the market, the shift to all-things SUV may be pushing this decline of higher-end car prices, suggesting there could be some better deals at auction in these segments.
Looking back at last month, there are few noteworthy gains as most vehicles are down. Full size vans, typically are commercial products, are up by 1.2 points where most other segments are flat or down. Full size car is off by 1.7 points, midsize crossover fell by 1.1 points and the biggest decline month-over-month were small pickups at 2.2 points.
This has been the first down month in quite some time, however, looking at the bigger picture we are still at near record levels of retained values. The index is at 2.1 points a head of where it was twelve months ago. The coming months will tell if this is just a temporary blip or the start of a larger downward trend. “Spring is coming, so there are bound to be a few Robins on the horizon and some Swallows too,” says Murphy.
This Index serves to offer unbiased and accurate insights and statistics regarding the health of the used wholesale vehicle market in Canada.
The Canadian Black Book Used Vehicle Retention Index is calculated using Canadian Black Book’s published Wholesale Average value on two- to six-year-old used vehicles, as a percent of original typically-equipped MSRP. Canadian Black Book’s Wholesale Average is a benchmark value for used vehicles selling in the wholesale auctions with the vehicle quality in average condition. The index is weighted based on used vehicle sales volume and adjusted for seasonality, vehicle age, mileage, condition, and inflation (MSRP).
Aggregated from daily vehicle value updates, and captured throughout thousands of wholesale vehicle transactions across the country, the Canadian Black Book Used Vehicle Retention Index represents data across all regions of Canada. The Index is based on a comprehensive list of vehicles included in the Canadian Black Book wholesale database, and includes no bias toward any brand, data source or region, ensuring an accurate report of the used vehicle market.
The Index is posted monthly on http://blog.canadianblackbook.com/ and distributed to automotive media for wider industry consumption.