May 2024 Residual Values Forecast

Welcome to the premier edition of Canadian Black Book’s RV Newsletter, where we continue our tradition of scrutinizing the “input variables” that shape the automotive market. Before the pandemic, average retention values remained quite consistent. Then, in CY 2022, the market experienced an unusual surge in values—a consequence of the pandemic-induced supply shortages. Now, we foresee these retention values slowly reverting to their pre-pandemic levels. This shift is mainly due to the stabilization of vehicle supply, paired with reduced market demand led by consumer unaffordability. The persistent rise in new car MSRPs and interest rates has outpaced vehicle improvements. This imbalance suggests that retention values could continue to trend downward. For a more detailed analysis and the latest updates in the auto industry, please see our Weekly Market Update Report, which offers week-toweek insights.