Auto Service World
News   January 25, 2024   by Adam Malik

What will be the story for used vehicles in 2024?


Image credit: Depositphotos.com

Used vehicle values have trended downward on both sides of the border in recent months. A recent analysis expects pricing to remain high.

Canada Black Book’s Used Vehicle Retention Index reported values in November at 150.2, meaning used vehicles aged two to six years were 50.2 per cent higher than its benchmark. The index peaked at 165 in March 2022 and hasn’t been this low since it was 152.6 in November 2021. The index sat at 155.2 in October.

In the U.S., values are higher. J.D. Power reported its Used Vehicle Value Index at 197.2 in November, down from a peak of 223.8 in December 2021.

“With our expectation that the OEMs will be disciplined in matching future production levels with demand, we anticipate that the economic difference between new and used vehicle values will remain at levels that will drive sound demand for used vehicles and, in turn, spur sustained elevated pricing,” noted rating agency DBRS Morningstar.

The agency also anticipates higher levels of new vehicle supply and pent-up demand to be sustained for both new and used vehicles for the year. It believes affordability issues around new vehicles will temper growth in this area, which will be a corresponding tailwind for used vehicles.

Meanwhile, leasing volumes are expected to improve as new vehicle inventory builds.

“Overall, we anticipate recovering levels of leases will be driven by improved OEM production and higher inventory, as well as due to OEMs having improving visibility into used vehicle values,” DBRS observed. “Additionally, with growing inventory levels, we anticipate OEMs increasing the use of incentives to drive new vehicle sales, including lease programs.”


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