An employee looks at a Volkswagen Beetle car during a ceremony marking the end of production of VW Beetle cars. VW Beetles ranked at the top of the Canadian Black Book’s 2022 Best Retained Value Awards. The fact Beetle was recently discontinued has made it a hot commodity. IMELDA MEDINA/REUTERS

Used cars are holding their value better than ever, according to Canadian Black Book’s 2022 Best Retained Value Awards. But, the situation is unlikely to last.

On average, 2019 model-year vehicles are today still worth 80 per cent of their original price, an all-time high, according to CBB, a Markham, Ont.-based company that provides vehicle valuations.

The firm’s Best Retained Value Awards are handed out annually to four-year-old vehicles that experience the least amount of depreciation. (It’s not to be confused with CBB’s Best Residual Value Awards, which forecasts the future values of new vehicles.) Some of this year’s category winners include the Toyota Tacoma pickup, Porsche Macan SUV, Mercedes A-Class, Ford Mustang and Subaru Crosstrek.

Short supply of used vehicles and strong demand helped retained values reach new heights, but they have likely peaked.

“Our anticipation is that, this year, retained values really reached their highest point,” said Daniel Ross, senior automotive analyst for valuations and residuals with Canadian Black Book. “We don’t really imagine [retained values] can go much higher than this anyway,” he added.

In 2019, four-year old vehicles retained just 52 per cent of their value on average, according to CBB data. That figure increased to 64 per cent in 2021, before jumping to 80 per cent this year.

For the first time since CBB began handing out its Retained Value Awards 15 years ago, some vehicles didn’t depreciate at all. Instead, they increased in value compared to their original manufacturer suggested retail prices (MSRPs). Four-year old Chevrolet Corvettes, Volkswagen Beetles and Ford Transit vans were all worth more in 2022 than they were when new.

In the case of the Beetle, the fact it was recently discontinued made it a hot commodity. “People know it’s not coming back; it’s an iconic name, and they wanted one of the last ones,” said Ross. In the case of the Corvette, short supply of the new model likely drove up prices of older models.

Varying supply levels between makes and models certainly played a role, but for the most part Ross said it was the well-known models with strongest reputations for reliability that retained the most value. Toyota and Porsche were the brands with the best overall retained value, while Hyundai, Mazda and Kia were on the most-improved list.

“There are economic variables developing that won’t make the used car market as strong as it has been,” said Ross, adding that the high cost of gas, rising interest rates, plus an increase in supply and a decline in demand should help bring used-car prices back down. “We believe this should be the peak for [retained] values,” he said.

In July, Autotrader noted the first downturn in used car prices, month-over-month, since January 2020.

In particular, prices of used full-size pickups and SUVs levelled off in spring, and have started to decrease in the last several months. On the flip side, values of used sub-compact and compact cars saw the most growth year-over-year, CBB data shows.

“The larger the car, the more suffering in terms of value it has had recently,” Ross explained. It’s a trend that suggests high fuel prices and rate hikes are starting to affect the types of vehicles Canadians are buying and selling.

Just don’t expect prices to suddenly hit rock bottom. “Nothing’s really going to go back to what it was prepandemic,” Ross said. “Three, four or five years out, values are still going to be above the point we were at before the pandemic.”

Here is the full list of CBB’s 2022 Best Retained Value Award category winners:

Car: Main

1. Volkswagen Beetle
2. Chevrolet Spark
3. Toyota Yaris

Car: Luxury

1. Mercedes Benz A-Class
2. Mercedes Benz CLA-Class
3. Mercedes Benz C- Class

Car: Prestige

1. Mercedes Benz CLS-Class
2. Porsche Panamera
3. Lexus LS

Sport Car: Main

1. Ford Mustang
2. Dodge Challenger
3. Mini Cooper

Sport Car: Luxury

1. Chevrolet Corvette
2. Porsche 911
3. Porsche 718 Cayman

Small Pickup

1. Toyota Tacoma
2. Ford Ranger
3. GMC Canyon

Full-Size Pickup

1. Chevrolet Silverado HD
2. GMC Sierra HD
3. RAM HD

SUV: Main Sub-Compact

1. Subaru Crosstrek
2. Nissan Kicks
3. Honda HR-V

SUV: Main Compact

1. Toyota Rav4
2. Subaru Forrester
3. Honda CR-V

SUV: Main Mid/Full

1. Toyota 4Runner
2. Jeep Wrangler
3. Toyota Highlander

SUV: Luxury Sub-Compact/Compact

1. Porsche Macan
2. Mercedes-Benz GLC-Class
3. Cadillac XT4

SUV: Luxury Mid/Full

1. Mercedes Benz GLE-Class
2. Porsche Cayenne
3. Lexus LX

ZEV Main

1. Nissan Leaf
2. Hyundai Ioniq EV
3. Chevrolet Bolt

ZEV Luxury

1. Audi e-tron
2. Jaguar I-Pace
3. BMW i3

Commercial Van

1. Ford Transit
2. Ford Transit Connect
3. Mercedes Benz Sprinter

Top of Form

 

Bubbers, M. (2022, November 21). The used cars with the highest retained value, including some that are worth more. The Globe and Mail. Retrieved November 22, 2022, from https://www.theglobeandmail.com/drive/article-the-used-cars-with-the-highest-retained-value-including-some-that-are/

 

The past 3 quarters of 2022 have been full of problems in the chip supplies and delays in production of vehicles and parts. The brands that will be able to succeed in this environment will be the ones dominating the market for new and used cars at the end of 2022 and beginning of 2023

This year has been unpredictable with significant year-over-year sales surges running back to back with disastrous quarterly declines across large swathes of the Canadian auto industry. Just look at the third-quarter for evidence: traditional Detroit vehicles enjoyed an 18-per-cent sales improvement compared with the same period in 2021, while Asian and European brands combined for a 28-per-cent nosedive.

We know that sales results in 2022 aren’t linked to demand, at least not in the traditional sense. Sales results — the real-world delivery of a vehicle to a customer — are driven by the ability to manufacture a vehicle. Or the lack thereof. And while the historic norm revolved around an automotive industry that built as many vehicles as possible, and incentivized to cope with any surplus, the automotive industry of 2022 is largely incapable of building enough vehicles to restore inventory at dealers.

The final list of Canada’s 10 best-selling vehicles during 2022’s first three-quarters is therefore very much a list that showcases which automakers are most-equipped to overcome a supply chain crisis. That doesn’t make it any less interesting than any other year, particularly given how much movement there’s been throughout much of the top 10.

10. Ford Escape: down 5 per cent in sales

Marginally outpacing the Jeep Wrangler for the final slot in the top 10, the Ford Escape is three spots ahead of where it was at this time one year ago. Don’t thank Q3. As much as the Ford brand had an outstanding summer (up 12 per cent in a market that was down 12 per cent), the Escape’s third-quarter 25-per-cent drop was an outlier.

9. Hyundai Elantra: down 1 per cent

The auto industry’s overall downturn, equal to 150,000 lost sales over the course of nine months, is nothing compared to the relatively tiny passenger car market’s loss of nearly 60,000 units. Cars account for only 18 per cent of the market, but they make up 39 per cent of the lost sales. Yet the Hyundai Elantra has essentially no part in all that. Elantra volume is steady at just over 2,200 units per month, on average, virtually on par with 2021 levels. The Elantra ranked 14th overall at this stage of 2021.

8. Honda CR-V: down 45 per cent

Bearing the brunt not only of an industry-wide shortfall of parts but also the production complications of a generational changeover, the Honda CR-V is shedding volume at a nearly unbelievable rate. Through the first nine months of 2021, Honda Canada had already reported 42,944 sales. Presently switching from the fifth to the sixth-generation CR-V, Honda is tracking toward its lowest-volume CR-V sales year since 2011.

7. Honda Civic: down 27 per cent

The Honda Civic has been Canada’s best-selling car in each of the last 24 years, but 2022’s outcome seems sorely in doubt. The Civic trails its traditional second fiddle by 2,621 units. The Civic was trailing at this stage of 2021, as well, but not by so significant a measure. Down 27 per cent this year, the Civic is emblematic of Honda’s overall predicament: brand-wide volume is down 32 per cent this year.

6. Toyota Corolla: down 21 per cent

On track to end 2022 as Canada’s best-selling passenger car for the first time ever, the Toyota Corolla is still on track to slow at the same precipitous rate as the car market overall. Fewer than one out of every five new vehicles sold in Canada are cars. Granted, the Corolla and Honda Civic account for one out of every four passenger cars sold this year.

5. GMC Sierra: down 9 per cent

Don’t let rising fuel prices stand in your way — pickup trucks are in control in Canada. Even the GMC Sierra, down 9 per cent through 2022’s first nine months, isn’t shedding sales as quickly as the industry at large. Indeed, third-quarter Sierra volume jumped 20 percent, a part of GM’s overall 28-per-cent uptick.

4. Chevrolet Silverado: up 1 per cent

Adding up Chevrolet’s total Silverado volume doesn’t exactly portray GM’s overall impact on Canada’s full-size pickup truck market. Combined, the Silverado and its GMC Sierra twin produced 80,849 sales during 2022’s first three-quarters, very nearly enough to catch Canada’s No.1 vehicle. But not quite.

3. Toyota RAV4: down 20 per cent

Narrowly holding onto a podium position after a third-quarter in which sales slid only 7 per cent, the Toyota RAV4 is a sure bet to finish 2022 as Canada’s best-selling SUV for a seventh consecutive year. The RAV4 actually outsold its top direct rival, the Honda CR-V, by more than two-to-one over the course of the summer.

2. Ram Pick Up: up 4 per cent

With 25 per cent of all full-size pickup sales in Canada, Ram’s truck line has grown its market share by nearly two points compared with the first nine months of 2021. To be fair, Ram has no hope of catching the top truck, besides the fact that GM’s truck twins easily outsell the Ram, as well. But in a market that’s suffered huge declines in 2022, Ram’s Stellantis parent company isn’t going to be disappointed with a 4-per-cent year-over-year increase in volume.

1. Ford F-Series: down 5 per cent

After a third-quarter in which Ford boosted F-Series sales by 16 per cent compared with 2021, this lead is locked in. It would take a small miracle for Ford’s rivals to sell 84,000 trucks in 2022, let alone enough vehicles to match Ford’s year-end total that will surely top 100,000 units for an 11th consecutive year. No other vehicle line in Canadian history has ever hit six digits.

 

Cain, T. (2022, October 26). Canada’s 10 best-selling vehicles in 2022’s first three-quarters | driving. Driving. Retrieved November 2, 2022, from https://driving.ca/column/driving-by-numbers/canadas-10-best-selling-vehicles-end-2022s-q3