CBB Vehicle Value Index Hits Lowest Point Since Dec 2021
Canadian Black Book released its Used Vehicle Retention Index for October 2022, which declined in 1.8 points (1.1% month-over-month) after some small gains in September. The decrease brings the Index back to the level it was in December 2021, at 158.5 Index points.
Year-over-year increases are still significant, whereby October 2022 has seen values increase 13.7%; however, annual growth is beginning to show signs of decline. In January 2022, year-over-year growth was at 44.1%, in June, the growth rate was at 28.9%, and now it is just over 13%.
Year-to-date, the Index is down 3.6 Index points compared to January when the Index was at 162.1 Index points. The Index peaked in March of 2022 at 165 Index points. Preceding that March peak was a run of unprecedented growth in used values beginning in the late summer of 2020, when the Index dipped to 100.5 points.
“The wholesale market is beginning its correction after two years of shocking increases. This won’t happen overnight, and likely will not return to pre-pandemic levels, however, we do expect the downward trend to continue,” says David Robins, Principal Automotive Analyst and Head of Canadian Vehicle Valuations at Canadian Black Book.
Year-over-year, most segments measured by Canadian Black Book saw growth except larger vehicles like Full-Size Pickups, which lost -6.79% compared to October 2021, Full-Size Crossover/SUV losing -4.97% and Small Pickup decreasing by -1.5%. Conversely, Sub-Compact Car and Compact Car saw the most growth year-over-year, with 41.57% and 32.18% respectively, further backing up the theory that fuel prices are driving purchase behavior.
Only 9 of the 22 vehicle segments tracked on the Index saw some value growth with Minivan leading the way with month-over-month change of +2.39%, followed by Sub-Compact Car at +1.64% and Luxury Car at +0.98%. Of the remaining 13 segments, the largest value losers were Full-Size Van at -5.32%, Mid-Size Crossover/SUV at -3.35%, and Sport Car at -2.69%.
The Canadian Black Book Used Vehicle Retention Index is calculated using CBB’s published Wholesale Average value on two to six-year-old used vehicles, as a percent of original typically equipped MSRP. It is weighted based on registration volume and adjusted for seasonality, vehicle age, mileage, and condition. The Index offers an accurate, representative, and unbiased view of the strength of today’s used vehicle market values. The Index dates to January 2005, where the Canadian Black Book published a benchmark index value of 100.0 for the market.
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