Analyzing the Prolonged Downward Trend in Black Book's Used Vehicle Retention Index

Price Easing in the Wholesale Vehicle Market

As the wholesale vehicle market transitions from spring, prices are persistently easing when compared to the levels observed a year ago. This adjustment reflects the ongoing dynamics within the market.

Eighth Consecutive Year-Over-Year Decline in Black Book's Index

Black Book's Used Vehicle Retention Index recorded its eighth consecutive month of year-over-year decline in May, reaching 175.4, a 7.1% decrease compared to May 2022. While the index consistently slowed down on a year-over-year basis since October, the month-to-month movement has shown a mixed pattern, as indicated by Black Book's data.

Varying Month-to-Month Fluctuations

The year began with a 1.0% month-over-month drop in the Black Book index, followed by gains of 1.9% in February and 2.9% in March. However, both April and May experience marginal month-over-month movements, with a slight decrease of 0.1% recorded each month.

Seasonal Adjustment and Market Observations

Black Book's Chief Data Science Officer, Alex Yurchenko, noted that in May, wholesale prices declined at an appropriate seasonal rate, leading to a relatively stable seasonally adjusted Used Vehicle Retention Index. Yurchenko also highlighted that consumer confidence remains low, resulting in a higher days-to-turn measure and an increase in used vehicle inventory by the end of the month.

Projecting Future Trends and Demand

Despite uncertainties in the broader economy, Yurchenko anticipates the continued decline in used wholesale and retail prices throughout the summer, which is expected to positively impact the demand for used vehicles. This projection takes into account the evolving market conditions and suggests the potential for increased consumer interest in the used vehicle segment.

By closely monitoring price trends and anticipating shifts in demand, industry stakeholders can effectively navigate the changing landscape of the wholesale vehicle market and adapt their strategies accordingly.