Index reverses a 3-month slide and increases to 188.8 points in May 2022 as tight new inventory and record low incentives push used wholesale prices up across most segments.
IMAGE: Black Book
LAWRENCEVILLE, Georgia – Black Book, a division of Hearst that provides industry-leading used vehicle valuations and residual value forecast solutions, released its Used Vehicle Retention Index for May 2022. The Index increased to 188.8, a 3.4-points (or 1.8%) gain. The Index currently stands 18% above where it was at the same time in 2021 and 65% above March 2020, pre-pandemic.
“In May, we saw a change in the trend of wholesale prices of 2-8-year-old vehicle segments that comprise of Black Book’s Retention Index” said Alex Yurchenko, Chief Data Science Officer at Black Book. “Even with softening of demand, wholesale prices rose across almost all segments (with the exception of some sporty and luxury segments continuing to decline).
“New vehicle inventories are stable but low, with no relief in sight. Retail incentives continued to decline and dropped to about 2.8% of the typically equipped MSRP (as tracked by Black Book). With this pressure from the new vehicle’s market, used wholesale prices rose, even with the softening of retail demand due to low consumer confidence and record high gas prices.”
The Black Book Used Vehicle Retention Index is calculated using Black Book’s published Wholesale Average value on two- to six-year-old used vehicles, as 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.
To obtain a copy of the latest Black Book Wholesale Value Index, please click here.
Originally posted on Auto Dealer Today
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