Canadian Used Vehicles Worth More Than Ever According to CBB Awards
March 22 2021
2021 CBB Retained Value Awards Shatter Highest Ever Results Pandemic Effects Have Huge Impact on Used Vehicle Retained Values
Markham, ON, March 22, 2021- Today, Canadian Black Book announced its 2021 Best Retained Value Award Winners. The fourteenth edition of the much anticipated awards featured the highest ever industry average used vehicle retained value across all vehicle models in Canada, since the yearly awards began in 2007. The retained value across every vehicle in Canada measured for the 2021 Awards showed that four-year-old models (2017 model year) held an astonishing 61.5% of original MSRP, industry wide. To put this into perspective, the closest year was just last year, when the industry average was 56.6%, and for further perspective, note that 2019 saw a 52% industry average. In short, today used vehicles are holding far more value than ever before.
“In terms of retained values, the past year has been a wild ride to say the least. We have been through steep record setting declines last spring, followed by rapid increases culminating in record level retained values in Canada across the board,” says Yolanda Biswah, Vice President, Sales at Canadian Black Book. “Much of the gains have been propped up by economic phenomena directly related to the global pandemic,” she adds.
Ultimately, the overarching factor contributing to the large gains in retained value has been supply, or the lack thereof. Supply disruptions have been a boon to the industry since the early days of the pandemic. Retail traffic slowed to a crawl due to COVID-19 related restrictions, which stalled any trade-in activity for months. Rental agencies saw major business loss and held onto units longer, keeping them out of the used market. Repossessions were largely put on hold for consumer relief during the difficult economic times, which have still yet to get back to pre-pandemic levels, again keeping those vehicles away from auction and used lots. People have been driving less and therefore keeping cars longer and therefore not trading in.
Supply from OEMs and parts suppliers (e.g., microchips) has been slowed and delayed through the past 18 months, causing shortages of new units, which has upped demand for used. Couple this with a general increase in demand for slightly used models in good shape, and we find these units turning quickly off of used lots. These quick sales are depleting an already low supply, and we are seeing historically high retained value as a result, as illustrated by the 2021 Canadian Black Book Best Retained Value Awards and the monthly CBB Used Vehicle Retained Value Index which has posted record levels for many months straight.
The Canadian Black Book Best Retained Value Awards quantify retained value for every model of four-year-old vehicles in Canada in 23 segments. There are also three ‘Overall Brand Awards’ presented to OEMs that hold the most value amongst their full product line. For 2021, the ‘Overall Brand Awards’ for Cars goes to Honda; for Trucks/SUVs to Toyota; and for Luxury Brand to Porsche. Across all car segments overall, on average they held 53.1% of original MSRP after 4 years (across nearly 3,000 trims), while trucks/Vans/SUVs held a substantially higher 63.6% (across nearly 13,000 trims).
“It’s not surprising that Trucks and SUVs hold value better, as these segments are the ones that command more consumer demand here in Canada, which drives up the prices,” says Biswah.
Illustrating the aforementioned trend away from cars is the lower average retained values in these categories. For example, as a category, Premium Luxury Cars only held 47.6% or MSRP after four years, Full-Sized Cars only 49.1%, and Sub-Compact Cars didn’t fare much better at 51.1%. This is compared to the larger segments such as Small Pick-Ups that held 68.8%, Full-Size Pick-Ups at 65.4%, and Full-Sized Crossover/SUVs not far behind at 63.1%.
Helping to prop up these extraordinary retention numbers for trucks, crossovers and SUVs are some very impressive individual category winners. The Small Pick-Up category was won again, as it has for the past 12 years (the longest winning streak in awards history) by the Toyota Tacoma. This year, the Tacoma also broke the record for highest ever retained value. The 2017 Toyota Tacoma has held an incredible 87.1% of its original MSRP. The Jeep Wrangler and Porsche 911 come second in highest retained value, both with 82.3%. The Zero Emission category has made progress since it was first included as a category in 2019. The winner in the segment, the Chevy Bolt, took a big leap forward with 56% vs the Ford Focus winning the category last year at 51%. As a whole, the category itself held 47% of original MSRP on average versus 45% last year and only 40% in 2019. Used EVs and BEVs are becoming more valuable.
In terms of brand success, Toyota still leads the way, however in less dominant fashion compared to past year, with six category wins (including 2 for Lexus), one Overall Brand win and 18 total mentions (first, second or third in a given category). Honda is second with five wins, one Overall Brand win, and nine mentions; followed by Mercedes-Benz boasting three wins and 13 mentions. Porsche, which only qualifies for a small number of categories, did very well with three category wins and one Overall Brand victory. Domestic brands Ford and GM matched each other with two wins each and five mentions, while Stellantis recorded one win and seven mentions.
Other notable winners include the Jeep Wrangler, which this year changed categories to Mid-Size Crossover/SUV to better represent the four-door version, which represents the bulk of sales for that model. 2021 is the first year it won in that category, however, the Wrangler is now a winner ten years in a row. The Honda Fit won for the seventh time since 2012 in Sub-Compact Car. Toyota Prius V took the victory in Compact Car for the fifth time in six years. In Full-Size Car, the Toyota Avalon has won five years running and ten of the last twelve years. The Porsche Panamera has an eight year streak of wins in Premium Luxury Car. The Honda Odyssey has taken top spot in Minivan eight times since 2010, while the Toyota Tundra wins its eleventh category win in the past 12 years in Full-Size Pick-Up.
Some first-time winners include the Mercedes-Benz E-Class in Luxury Car, the Honda CR-V in Compact SUV, the GMC Yukon in Full-Size SUV and the Chevrolet Bolt in Zero Emission.
2021 Canadian Black Book Best Retained Value Award Results: