Used Market Update: February 4, 2021
After increasing 0.6% the week ending Jan. 24, wholesale auction prices continued to rise during the week ending Jan. 31. Prices last week improved 0.6% matching prior week levels. Last week’s result extends the longest streak of week-over-week price increases the wholesale market has recorded since back in Aug. 2020, prices have now experienced slight increases for the past five consecutive weeks. Wholesale prices are now only 8% lower than their peak back in Aug. 2020.
Weekly Wholesale Auction Price Index (Mar 1 = 100)
Wholesale prices for mainstream segments were generally positive for the week ending Jan. 31. Last week small car prices were the strongest, price for the segment increased by nearly 3%. Other mainstream segments also experienced gains, for example large pickup, large SUV, and midsize van prices increased 1% apiece. Remaining mainstream segment prices increased between 0.3% (compact car) and 0.8% (midsize pickup). On the premium side, prices weren’t quite as strong as their mainstream counterparts, price movement was mixed. In general, small and midsize SUV/car prices were positive for the week, while compact and large SUV/car prices were flat to down slightly.
Wholesale Auction Sales Reaches 86,000 Units
Wholesale auction sales of vehicles up to 8 years old reached approximately 86,000 units during the week ending Jan. 31. Last week’s result was consistent with the recent trend of sales in the 80,000 to 90,000-unit level. Looking back to the same period in 2020, sales volume reached approximately 112,000 units during the last week of January. Wholesale sales continue to run approximately 25% to 35% below prior year levels, which is helping keep used prices strong.
Weekly Wholesale Auction Sales (000s)
In 2021, used prices are expected to remain near historic levels as pandemic-related macro-economic headwinds remain in place. By year's end, prices in Q4 2021 are expected to be essentially flat with where prices were in Q4 2020 and will remain higher than pre-virus levels. It is important to note, however, that while the outlook remains optimistic, there remains a great deal of uncertainty surrounding the effect of virus outbreaks, vaccine roll out, federal stimulus, employment conditions, new vehicle production constraints, as well as the ongoing semiconductor (microchip) shortage on the new side of the market. Given these unknowns, a heightened degree of market volatility should be expected.
