Canadian Black Book’s Retained Value Index set a record loss, for the first time in a long time, in April.
The index revealed a strong positive trend for more than a decade, but the negative impact on values in the Canadian market, due to the COVID-19 crisis, was anticipated.
“For the month of April the index fell 3.6 points from March and 1.5 points from April 2019, the largest monthly declines we have ever seen since the index began tracking in 2005,” said CBB in a news release. “We do expect this to be the case for several months as our industry and the broader economy recovers from the crisis at hand.”
There are few segments with gains this month due to the decline, compared to the previous month (in March). The top performer was the full-size luxury CUV/SUV segment that rose a mere 0.3 points, while the prestige luxury car segment was up 0.2. The compact van segment was third — not because it gained — but because it managed to remain flat, so there was no change from the previous month.
On a year-over-year basis from April 2020, subcompact cars were up 8.4 points, full-size vans up 5.8, and compact cars jumped 1.9.
“Unfortunately, there is a lot more red ink on this month’s scorecard, with compact cars taking the biggest hit from last month with an adjustment of -6.0 points, followed by Mid-Size cars at -3.4 points,” said CBB. “Even Sporty Cars were not spared, with a decline of 4.9, which is peculiar considering we are entering the prime selling season for fun-to-drive vehicles.”
CBB said several traditional seasonal patterns are bound to be disrupted due to the current pandemic. For example, minivans — when compared to the same period last year, dropped 8.9 points. It was the poorest performer in April. And small pick-up trucks are close behind with a decrease of 8.8 points, followed by sporty cars (down 6.6 points) — all YOY.
CBB is anticipating a decrease in values of 17 points total, within the next three to nine months. “That seems like a very hefty number, but we have already fallen 5 points in just 60 days,” said CBB. “We expect there are more records to be broken.”
It’s not all bad news though, as CBB expects values to see a strong resurgence and recovery of what will be lost this year — that is, when the economy is back on track.
