Black Book: Retail Demand Rises

By Staff Writer July 09, 2020

Black Book released its Used Vehicle Retention Index for June 2020 (115.1), a +9.1-point change from May (106.0).

“Fueled by Federal stimulus and a lack of new inventory, retail demand for used vehicles in June was strong,” said Alex Yurchenko, senior vice president, data science. “Additionally, limited used supply due to various factors (e.g. delayed lease returns, pause in many delinquency repositions and limited throughput of auctions) helped used prices to bounce back to pre-COVID-19 levels. Black Book’s Seasonally Adjusted Retention Index jumped a record 8.6 percent in June, matching the value of the Index in 2019. Due to weak economic conditions, we do not expect this strength to continue, and we project a drop in values later this summer.”

 Black Book’s Seasonally Adjusted Retention Index for Wholesale for 2019-20
Black Book’s Seasonally Adjusted Retention Index for Wholesale 2019-20

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.

The Index dates 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 percent while during 2016, the index fell by just 6.4 percent. 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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Last modified on Wednesday, 15 July 2020 16:54