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Pre-Owned Sales & Marketing Strategies | Trending Industry News
May 16, 2016

Black Book Unveils Residual Forecast On Three-Year-Old Vehicles

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Pre-Owned Sales & Marketing Strategies | Trending Industry News
May 16, 2016

Black Book Unveils Residual Forecast On Three-Year-Old Vehicles

Residuals Data Show the Impact Rising Supply will Continue to Have on Cars & Trucks Through 2019

LAWRENCEVILLE, GA (May 16, 2016) – Black Book, a division of Hearst Business Media that provides new- and used-vehicle valuation services and custom data licensing solutions, unveiled its May residual forecast illustrating the downward pressure on prices that increased supply will continue to have over the next few years.

Black Book forecast data show that residuals on an average three-year-old vehicle will dip from the current three-year retention of 52.0% in 2016, to 47.8% by 2019. Retention values on a three-year-old vehicle peaked in 2013 when vehicles were retaining approximately 54.5% of their original typically-equipped retail. Favorable credit availability, continued growth in demand, and consistently low gas prices have provided support in keeping retention rates high in the last five years. Increased used supply in the marketplace, driven by the significantly large volume of sales on new cars and trucks has played a driving role in slipping retention rates this year.

Here are the historical three-year retention rates and the projected residual forecast on an average three-year-old vehicle according to Black Book:
2012: 53.8%
2013: 54.5%
2014: 54.3%
2015: 54.1%
2016: 52.0%
2017: 50.1% (forecast)
2018: 48.6% (forecast)
2019: 47.8% (forecast)

The historical data represents published Black Book Wholesale Average values as a percent of new typically-equipped retail. The forecast represents published Black Book Residual Values  averaged across all three-year-old models.

“Despite the industry’s continued efforts to maintain a strong pace of sales on new cars and trucks, the increased level of supply in the used market has begun to weaken prices on both cars and trucks,” said Anil Goyal, Senior Vice President of Automotive Valuation and Analytics. “We saw the first sign of this in 2015, when cars saw above-average depreciation on the year, and this year we will see rising depreciation for truck segments as well.”

About Black Book
Black Book® is best known in the automotive industry for providing timely, independent and accurate vehicle pricing information, and is available to industry-qualified users through online subscription products, mobile applications and licensing agreements. A leading provider since 1955, Black Book has continuously evolved to ensure that it achieves its goal of delivering mission-critical information to its customers, along with the insight necessary to successfully buy, sell, and lend. Black Book data is published daily by National Auto Research, a division of Hearst Business media, and the company maintains offices in Georgia, Florida, and Maryland as well as the Canadian Black Book in Toronto. For more information, please visit BlackBook.com or call 800.554.1026.

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