Skip to main content
Industry News

October Sets Another CBB Index Record at 110.5 Points

By November 24, 2020No Comments

For the month of October 2020, the Canadian Black Book Used Vehicle Retention Index has set a new record high of 110.5.  This is up 1.5 index points, or 1.4% over the previous record high set just last month.   The record high levels are primarily due to shortages in supply of used vehicles in the marketplace.  Many months of lower new car sales have reduced the volume of vehicles entering the market as trade-ins.  High demand for used vehicle for export to the U.S. market has also siphoned off considerable volume of supply, from Canada.

Although 2020 was a record setting year for lease returns, the general state of low supply has meant that a higher proportion of grounding dealers (the retailer processing the lease return) have purchased the cars for their own inventory.  It is expected that the level of supply in the market will grow in 2021 as repossessions slowly rise and consumer demand stumbles.

For the month, the Compact Van segment, a favorite with so many delivery services, shows the largest increase at 4.4 index points.  This strong performance is followed by a 3.1 Index point gain for Compact Crossover/SUVs.  In third place for the month, in terms of value growth, is the Luxury Car segment at 3.3 Index points.

Compared to the same time last year, the Index is up by 2.5 points or 2.3% in value.  This clearly shows to what degree used market values have fully bounced back, from the massive near 8 point fall from earlier in 2020.

Looking back to October 2019, it is the Luxury Car Segment that has gained the most value, at 10 Index points.  This segment had been under considerable downward pressure as demand had faltered, in favor of the large number of SUV alternatives.  However, there has been a strong bounce back in values as supply of these premium sedans (e.g. BMW 5-Series, Audi A6, Mercedes-Benz E-Class) is short.   Full-Size Crossovers are in second place for value increases, from 2019 at 8.8 Index points, followed by Full-Size Cars at 8.3 points.

It was only the Sub-Compact Car segment which declined most this past month, by 1.0 index points.  With gas prices at an average of $1.00 per liter nationally, down from over $1.30 in May of 2019, demand has weakened for the segment.  With 30% lower fuel prices, upsizing to a Compact Car or some of the smaller SUV/Crossover alternatives is a decision many consumers are making.

Compared to October of 2019, the most significant decline in prices is seen in Full-Size Luxury Crossover SUV at -5.5 Index points.  This is followed by Small Pick-ups, with a decline of -1.2 Index points.  The other segments, compared to 2019, are up or essentially remaining flat.

Canadian Black Book expects this new record high may last longer than the 30 days of the previous record mark.