Canadian Black Book’s Vehicle Retention Index, which focuses on 2-6 year-old vehicles, declined by 5.3 points in May (5.0% year-over-year) and 3.2 points from the previous month in April (3.1% month-over-month).
Since March, the index has declined 7.8 points and CBB expects approximately ten more points of decline before values begin to increase again, which would be towards the end of the year.
On the vehicle front, CBB said minivans experienced an 11.6 point decline, followed closely by sporty cars at 11.2 and the small pickup segment, which was down 8.4 points.
“Looking back to April and comparing the tallies to May 2020, we see the Sporty Cars segment faring the worst, with a decline of 5.0 points, which is an exceptional decline for just one month,” said CBB in its update.
That segment should typically be doing well around this period of the year, without the COVID-19 pandemic.
The popular mid-size crossover segment declined 4.6 points and mid-size cars fell 3.8 points. The two segment declines are two more examples of unfavourably impacted segments for May.
YOY, the subcompact car segment gained a remarkable 7.6 points, while full-size vans are up 4.2 index points in the last 12 months.
“Our outlook for this segment is that it will be under pressure as some businesses shrink their fleets at a time when it will be a bit more difficult to find a buyer for a business-only type of van, due to the uncertain economic outlook,” said CBB.
When comparing May to April, there was one segment that managed an increase in index points: the prestige luxury car segment, which climbed by 0.2 points (and which basically means it was nearly flat).
“We fully expect that once some of the extra supply we are expecting over the next 5-6 months has run through the market and the economy starts to strengthen that prices will start to rebound,” said CBB. “Until that time, it is a buyers market and there are deals to be had out there in the lanes.”
