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/

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