LAWRENCEVILLE, Ga.—After seven months of declines, used vehicle values increased in February, according to new data from Black Book. But the increase is no surprise, as the spring buying season approaches, the company said.
Black Book’s Seasonally Adjusted US Retention Index increased 1.9% (3.1 points) to 170.9 from January 2023, which is 11.5% below where it was at the same time in 2022 and 49% above March 2020, pre-pandemic.
“Wholesale prices for the two- to six-year-old vehicle segments that comprise of Black Book’s Used Vehicle Retention Index started to increase at the end of January and began picking up steam by the end of February,” said Alex Yurchenko, chief data science officer at Black Book. “After several months of steep declines in wholesale and used retail prices, in addition to poor performance at the auctions, it seems that there is an anticipation of increased used retail demand in the next several months.
Auction Action
“Activity at auctions increased last month as dealers were preparing for the Spring market – we saw measurable improvements in the conversion rate and volume going through the auctions,” Yurchenko continued. “We saw price increases across all mainstream segments with Compact Cars and Compact Crossovers leading the way with the highest appreciation (1.3% and 2.2% for the whole month, respectively). Now, retail listing prices are still on a decline, but we expect a reversal in the near future as demand for used vehicles strengthens in the short-term.”
How Values are Calculated
The Black Book Used Vehicle Retention Index is calculated using Black Book’s published Wholesale Average value on two- to six-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.
To obtain a copy of the latest Black Book Wholesale Value Index, click here.
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