LAWRENCEVILLE, Ga.—The rate of used vehicle depreciation increased slightly in August, according to a new report.
Black Book’s Used Vehicle Retention Index for August dipped slightly to 112.6 from 113.0 in July.
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. The Index offers an accurate, unbiased view of the strength of today’s used vehicle market values, Black Book stated.
The Index changed -0.4% since the previous month, and has now changed -3.9% year-over-year. Compact cars, near-luxury cars, and sub-compact cars each saw slight gains during August, despite the Index overall seeing a slight drop. It is expected that trucks and pickups and even smaller cars may see gains in the near term as dealers and individuals look to replace damage or destroyed vehicles from Hurricanes Harvey and Irma, Black Book reported.
“While no one wants to see the devastation caused by these storms, they tend to produce a bit of a spike in buying activity afterwards, especially as dealers look to replace lost inventory and people receive their insurance checks,” said Anil Goyal, senior vice president of automotive valuation and analytics for Black Book. “The industry is well prepared to meet the increased demand due to replacement as used vehicles are shipped to the impacted areas. We expect the buying spree to last a couple of months.”
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% 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 of 2014 when it hit a peak of 128.1.
To obtain a copy of the latest Black Book Wholesale Value Index, click here. Click here to obtain a copy of the latest Used Vehicle Retention Index data.