Year-over-year hikes slow, but used-car prices still 65% higher than pre-COVID
Another sign that high wholesale vehicle prices aren’t going anywhere sometime soon: Black Book’s Used Vehicle Retention Index ended a three-month run of sequential declines in May and eclipsed year-ago numbers by more than 18%.
Specifically, the index came in at 188.8 for May, beating April’s reading by 1.8% and May 2021 by 18.3%.
After a 0.6% month-over-month increase in January, the Black Book index had dipped sequentially by 2.0% in February, 2.7% in March and 1.3% in April, before May’s increase.
“In May, we saw a change in the trend of wholesale prices of 2-8-year-old vehicle segments that comprise of Black Book’s Retention Index,” Black Book chief data science officer Alex Yurchenko said in a news release. “Even with softening of demand, wholesale prices rose across almost all segments (with the exception of some sporty and luxury segments continuing to decline).
“New vehicle inventories are stable but low, with no relief in sight. Retail incentives continued to decline and dropped to about 2.8% of the typically equipped MSRP (as tracked by Black Book),” Yurchenko said.
“With this pressure from the new vehicle’s market, used wholesale prices rose, even with the softening of retail demand due to low consumer confidence and record high gas prices.”
The year-over-year gains in wholesale prices have become less steep each month of 2022. After a 52.8% uptick in January, there was a 45.9% hike in February, a 33.0% increase in March and a 21.6% gain in April, before May’s 18.3% uptick, according to the Black Book data.
Still, it should be noted that May’s index was 65% higher than the pre-pandemic reading in March 2020, the company said.