Trend Hits Reverse: Used Vehicle Prices Head Different Direction

LAWRENCEVILLE, Ga.—The recent trend of increasing used vehicle values shifted into reverse in April, Black Book reported.

The company’s Used Vehicle Retention Index for April decreased -0.1% (0.2 points) to 175.6 from March 2023, which is 5.3% below where it was at the same time in 2022 and 53% above March 2020, pre-pandemic.

The reversal comes after used vehicle values began increasing again early this year, following a few months of declines.

“Wholesale prices for the two-six-year-old vehicle segments that comprise Black Book’s Used Vehicle Retention Index increased through April, but at a rate lower than what we would see during a typical pre-pandemic Spring Market,” said Alex Yurchenko, chief data science officer at Black Book. “We saw a substantial slowdown in price increases during the second half of April as concerns about demand increased.

What Company is ‘Starting to See’

“Wholesale prices in most compact to full-size mainstream segments underperformed last month, but prices of smaller (and cheaper) subcompact vehicles (both sedans and crossovers) overperformed in April,” continued Yurchenko. “We are also starting to see more pressure on wholesale prices due to several factors, including improved new inventory with increasing OEM incentives and concerns about affordability of used vehicles with high retail prices combined with increased financing costs. We expect wholesale prices to decline through the rest of the year even as the available used inventory will start to shrink in Q3 and Q4.”

How Index is Calculated

The Black Book Used Vehicle Retention Index is calculated using Black Book’s published Wholesale Average value on two- to six-year-old used vehicles, as percent of original typically equipped MSRP. It is weighted based on registration volume and adjusted for seasonality, vehicle age, mileage, and condition. 

To obtain a copy of the latest Black Book Wholesale Value Index, click here.