Historic Ascent For Wholesale Vehicle Values Finally Hits a Blip According to CBB Index

Canadian Black Book released its Used Vehicle Retention Index for May 2022, which has remained flat after decreasing in April for the first time in ten months. The monthly CBB Index stayed consistent in May at 162.6 Index points. This mark is -1.5% lower than the record of 165.0 set in March of this year.

Record wholesale prices were being set every month since August 2021 until this March. Although values are slightly down for May, the year-over-year increase is still substantial. Compared to May 2021, values are 31.6% higher this year. Over the past 23 months, the Index has seen 20 months of growth. In fact, all 20 of those months set all-time record highs. Only three months have not broken records in that period, which are July 2021, and April and May of this year.

“Given wider inflationary trends throughout the economy, skyrocketing gas prices, and rising interest rates, any relief in prices is a welcome sign. That said, our expectation at Canadian Black Book is that wholesale prices will remain high well into 2023,” says James Hancock, Director, OEM Strategy and Analytics at Canadian Black Book. “We anticipate 2022 to see a plateau for prices, with a gradual decline over the next couple years, however, prices are expected top remain well above pre-pandemic levels into 2026 and possibly beyond.”

In terms of segments, little has changed compared to April. Only three segments (Prestige Luxury Car, Compact Van and Full-Size Pick-up) had increases over 1%. Similarly, only three segments saw losses in value over 1% (Near Luxury Car, Full-Size Van and Sub-Compact Luxury CUV/SUV). Year-over-year Full-Sized Van (74.4%), Compact Van (55.9%) and Sub-Compact Car (51.2) had the highest gains. Conversely Full-Size Pick-up (7.7%), Full-Size Crossover/SUV (10.9%) and Full-Size Luxury CUV/SUV (14.6%) showed the least annual value growth.

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.