Used Market Update: December 11, 2020
After several weeks of price declines, wholesale auction prices increased during the week ending Dec. 6. This was the first week that prices have grown since they began their retreat in August, prices last week increased by an average of 1.6%. Looking back, prices have historically rebounded the week following the Thanksgiving holiday, and this year’s result followed in line. Wholesale prices are now 24% higher than their trough in April, and 5% above their level at the beginning of March.
Weekly Wholesale Auction Price Index (Mar 1 = 100)
Wholesale prices for mainstream segments increased an average of 1.6% the week ending Dec. 6 when compared with the prior week. Prices on the mass market side were up across the board. In general, mass market passenger car segments performed slightly better that SUV and pickup segments. Luxury segment prices didn’t perform quite as well as mass market vehicles. As a result, prices were up just 0.9%. Luxury results were mixed, however. Similar to the mass market side, passenger car prices were stronger than SUV segments.
Wholesale Auction Sales Reach 78,000 Units
Wholesale auction sales of vehicles up to 8 years old for the week ending Dec. 6 recovered after the Thanksgiving holiday week, reaching approximately 78,000 units. Last week’s result nearly matches pre-Thanksgiving results and is in line with expectations. In general, wholesale sales each week continue to trend lower than prior year results, this will continue as the market works through the disruptions caused by the pandemic.
Through the end of the year, prices are expected to continue to move lower through the end of December as pandemic-related macro-economic headwinds increase. By year's end, prices are still expected to be significantly greater than pre-virus levels. It is important to note, however, that while the outlook is relatively optimistic, there remains a great deal of uncertainty surrounding the effect of new virus outbreaks, the potential for another round of federal stimulus and overall employment conditions. Given these unknowns, a heightened degree of market volatility should be expected.
