08.04.2022

Fourth Month of Consecutive Losses For CBB Index

Canadian Black Book released its Used Vehicle Retention Index for July 2022, which has declined for the fourth straight month. This decline follows 8 months of consecutive growth in wholesale vehicle values in Canada. For July 2022, the Index has shrunk to 160.3 Index points (-0.6%) since June, which stood at 161.3 points.

This recent slide in values is a further indication that the record high growth in prices peaked when the Index grew to 165 points back in March of this year. The months leading up to March saw an unprecedented spike in values, leading to record prices far above previous records. As a result of that rapid growth in wholesale values that took place from August 2020 until this spring, although values have declined in recent months, the year-over-year growth is still up over 28%.

“July’s Index results are similar to June and further indicate that the peak in value growth has been passed,” says David Robins, Principal Automotive Analyst and Head of Canadian Vehicle Valuations at Canadian Black Book. “Sellers have been predominantly holding their floor prices, and the demand from buyers has not been supporting those higher prices.  As a result, vehicles have been selling at a slightly lower price each week in a typical depreciation pattern that we would see in an average year.  Supply has still remained low with most off-lease vehicles being bought upstream,” adds Robins.

Year-over-year, all segments measured by Canadian Black Book, saw growth. Full-Size Van witnessed the highest percentage growth at +53.86%, next was Sub-Compact Car at +52.34% and compact car at +48.74%. The segment that saw the least growth was Full-Size Pickup at only 1.37% value growth.

12 of the 22 vehicle segments tracked on the Index saw some value growth with Compact Van leading the way with month-over-month change of +2.52%, followed by Prestige Luxury Car at +1.82% and Compact Car at +1.11%. Of the remaining 10 segments, the largest value losers were Sporty Cars at -2.87%, Full-Size Van at -1.79% and Premium Sport Car at -1.6%.   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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