Canadian Black Book’s Used Vehicle Retention Index for December jumped 0.7% from November 2020 to reach 111.5 Index points, setting a new all-time high. The index was also up 2.9% year-over-year.
CBB said there was an “unusually broad range of changes” during 2020, shifting from a gain of 3.4% for February to a decline of 5.3% for June, and a year-over year change of 3.2 index points or 3%.
“Our expectation is that used vehicle retail demand will slowly weaken and the market will see a gradual increase in supply of used inventory,” said CBB, which is forecasting a continued decline in wholesale prices during the winter, when compared to the highs observed in recent months.”
CBB expects to see a more lasting recovery and greater stability of values beginning in 2021, pending the overall state of the economy and demand for vehicles.
In the longer term, it anticipates that the effects of the pandemic will be felt three years from now, but expects residual values to return to the pre-COVID baseline level, as used vehicle supply will decline — due to lost retail and fleet sales in 2020 and into 2021.
