Canadian Black Book’s Used Vehicle Value Retention Index for the month of June revealed some segment gains as values remained flat.
From February to May values fell by 7.8 points or 7.2%, but June marked a shift in the trend. The decline that occurred largely during the main part of the COVID-19 pandemic halted and remained flat, with a change of 0.01% — which means there was essentially no real change since May.
“We have seen stronger values, especially in the last few weeks of the month of June,” said Canadian Black Book in its update. “Unfortunately, this strengthening of the market is expected to be temporary.”
During the early months of COVID (March, April and part of May) the car market in Canada was disrupted and seemingly on pause. There was very little activity on the trade-in activity front, lease returns, repossessions, and wholesale.
“These are the key means of creating used car supply in Canada,” said CBB. “These earlier supply restrictions are now fuelling some stronger prices as the market works to meet pent-up demand from earlier in the year.”
On vehicles, and when compared to May, the sports car segment managed a 3.4 index point-increase, while premium sports cars managed a 2.5 point increase. Full-size cars experienced a boost of 1.9 points.
But not all segments were as lucky: large SUV/CUVs struggled to gain in retained value for June with full-size SUV-CUVs falling 4.2 index points, and mid-size luxury CUV/SUV down 2.4 points. And the mostly commercial vehicle segment of compact vans declined 3.4 index points.
However, there were increases in sub-compact cars — up 2.0 index points year-over-year, and full-size vans were up 2.0 points. Those were two of the largest positive shifts, according to CBB.
The biggest declines since June 2019 came from the full-size luxury SUV/CUV segment (down 10.6 points), followed closely by the minivan segment (down 10.5 points), and the compact SUV/CUV segment declined by 10.4 points.
“These are massive declines. Some of the decline is brought about by shifts in market tastes and competition, however, most can be attributed to the destabilizing impact of the global pandemic,” said CBB. “Looking forward to the second half of 2020 we do expect more declines overall as consumer demand remains uncertain, due to the current COVID-19 induced recession.”
