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Rock Solid: Used-Car Values Flat in April

May 01, 2018

Values for compact cars such as the Mazda3 are up 3.4% over the last 12 months, leading — and helping to stabilize — the pre-owned market, according to Black Book. Photo courtesy Mazda North America
Values for compact cars such as the Mazda3 are up 3.4% over the last 12 months, leading — and helping to stabilize — the pre-owned market, according to Black Book. Photo courtesy Mazda North America

LAWRENCEVILLE, Ga. — Black Book (div. Hearst Autos) released its Used Vehicle Retention Index for April. The figure remained unchanged from the previous month at 112.0 and has declined by a mere 1.0% over the last 12 months.

The Used Vehicle Retention Index is calculated using Black Book’s published wholesale average value on two- to six-year-old used vehicles, as a percentage of original, typically equipped MSRP. It is weighted based on registration volume and adjusted for seasonality, vehicle age, mileage, and condition. The index is billed as an accurate, representative, and unbiased view of the strength of the used-vehicle market values.

The monthly index has only declined once over the last four months, dropping from 113.3 to 112.0 at the end of February. Much of this recent strength has come from a stronger-than-average spring selling season, with a handful of car segments seeing a rise during this stretch: Since March, compact cars have increased 2.5% and are up an impressive 3.4% over the last 12 months. Mid-size cars are up 1.3% since March. On the other hand, full-size pickups, full-size SUVs and CUVs, and subcompact cars declined by 0.7%, 1.6%, and 1.2%, respectively, since March.

“The strength of several car segments over the last few months has been eye-opening, but it has certainly been helped by prices found with good value during this stretch along with rising gas prices,” said Anil Goyal, Black Book’s executive vice president of operations. “We expect that car values will soon return to a more seasonal pace of depreciation, fueled by still-high supplies in the broader market as we get into the summer months.”

The Index dates back to January 2005, where Black Book published a benchmark index value of 100.0 for the market. During 2008, the index dropped by 14.1% while during 2016, the index fell by just 6.4%. During 2011, the index rose strongly from 113.3 to 123.0 by the end of the year as the economy picked up steam and used vehicle values rose higher. It continued to remain relatively stable, rising slightly until May of 2014, when it hit a peak of 128.1.

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