While used values are facing little change over the last few months — and compared to the last year — the positive sign is that the sector is stable, according to the latest numbers.
Canadian Black Book’s Used Vehicle Retention Index for June 2023 showed that it sits at 158.5 points, a 0.3-point decrease from May. Year-over-year, the index is down 1.76 per cent.
“The Canadian wholesale market continues to be relatively stable this year without the wild swings up or down seen over the last few years,” observed David Robins, principal automotive analyst and head of Canadian vehicle valuations at Canadian Black Book. “Lack of both new and used car supply continues to be a challenge that we face with the situation slowly improving.”
The news could be seen as both good and bad news for consumers. Good in the sense that there haven’t been “wild swings” in pricing but values still remain elevated. For the aftermarket, so long as values remain high, consumers may opt to keep their vehicle, rather than replace it. And even if they choose a used option, they’re still likely to remain as aftermarket customers.
Last March, the index hit its peak of 165 points, representing the value of used vehicles being 65 per cent higher than the index’s benchmark. The index was last closest to the benchmark in late summer 2020 with a score of 100.5 points.
The index is using Canadian Black Book’s calculated wholesale average value on two to six-year-old used vehicles, as a percent of the original typically equipped manufacturer’s suggested retail price.
In the U.S., meanwhile, the Manheim Used Vehicle Value Index is down 10.3 per cent from a year ago, sitting at 215.1 points.
Unlike in Canada, “stability” is not a word they’re using to describe the state of current affairs.
“The wholesale market story for the first half of 2023 can be summed up in one word: Volatile,” said Cox Automotive chief economist Jonathan Smoke. “The result, however, is not unexpected. Larger upswings during the first quarter and a downward trajectory that began in the second half of March have brought us to roughly where we expected to be at this point in the year. The good news is that the worst of this is likely behind us. Used retail sales held steady in June and are showing signs of strengthening — inventory levels are generally balanced between supply and demand.”
The group also reported that used vehicle sales were down 4 per cent in June compared to May.