August 2020 Canadian Black Book Value Retention Index Sets Month Over Month Record
September 15 2020
For the month of August, the Canadian Black Book Used Vehicle Value Retention Index rose by a month over month record setting 3.73 Index points or 3.60%. The monthly Index tracks the actual retained value of two to six-year-old vehicles in the Canadian marketplace. The index adjusts for seasonality and vehicle condition, so it is a reliable barometer of used wholesale values trends. Particularly during the current COVID-19 pandemic, it is a graphic illustration of the volatile path the market has taking.
The recent radical increase in values, following the steep declines earlier this year is evidence of the roller coaster-like ride we’ve seen thus far in 2020 due to instability created by the pandemic. In April of 2020 we set the record for a single month decrease of the index at 3.58 Index points.
Compared to July 2020, it has been the Minivan segment that has the largest increase of 9.2 Index points for August. This was followed by the Full-Size Car segment with a strong gain of 7.1 Index points. Very close behind Full-Size cars was the Subcompact Car Segment with a hike of 7.0 Index points. There were no segments that saw a decrease in the month of August, which certainly is a rare occurrence. The smallest increases were seen in the Prestige Luxury Cars and the Small Pickup truck groups, which both increased by 0.5 Index Points. Near Luxury Cars fared marginally better, with a gain in Index points of 0.6.
Compared to August of last year, long before the pandemic, the market is up by 0.2 Index points. After the market’s dramatic rebound in July and August this year, the Index has returned to almost the same level it was twelve months ago. The largest increases compared to last August, were noted for Sub-Compact Cars at 9.2 Index points. The Full-Size Crossover/SUV rose by 5.9 and Sporty Cars were up by 5.3 Index points compared to a year ago.
The year 2020 has been a remarkable one, and a difficult one for the auto industry and indeed all Canadians. The up and down nature of used values are a natural outcome of the problem we all face. Continued instability in Index values, along with some record setting changes, are to be expected for the remainder of 2020.