The surge Hurricane Harvey created still is rippling through the wholesale market.
Black Book reported that its Used Vehicle Retention Index for September posted the largest month-over-month gain since March 2012. The index reading increased from 112.6 to 113.9.
Hurricane Harvey caused major flooding throughout parts of Texas, resulting in an estimated up to 500,000 cars and trucks needing to be replaced. The replacement process began in September, with compact cars (up 2.8 percent), compact crossover SUVs (up 2.4 percent), full-size cars (up 2.5 percent) and mid-size cars (up 2.3 percent) each seeing significant month-over-month increases within the Index.
“We certainly anticipated a near-term increase in the Index in last month's report, and with the storm replacement activity kicking in we believe this activity will continue in the next month but not much longer,” said Anil Goyal, senior vice president of automotive valuation and analytics for Black Book.
“We saw a nice bump in several car segments, and we also anticipate several truck segments to see increases as well, especially with the demand for service and construction vehicles. It was interesting that mainstream car segments and compact SUVs experienced the largest increase in immediate replacement demand,” Goyal continued.
The Black Book Used Vehicle Retention Index is calculated using Black Book’s published wholesale average value on 2- to 6-year-old used vehicles, as a percent of original typically equipped MSRP.
The index dates back to January 2005, where Black Book published a benchmark index value of 100.0 for the market. During 2008, the index dropped by 14.1 percent, while during 2016, the index fell by just 6.4 percent. During 2011, the index rose strongly from 113.3 to 123.0 by the end of the year as the economy picked up steam and used vehicle values rose higher.
It continued to remain relatively stable, rising slightly until May of 2014 when it hit a peak of 128.1.
To obtain a copy of the latest Black Book Wholesale Value Index, .