Used Market Update: November 23, 2020
After several weeks of price declines, wholesale auction prices moved lower once again the week ending November 15 marking the 13th consecutive week of downward price movement. Prices last week were reduced by an average of 0.4% and have declined by 8% since their peak in August. As wholesale prices continue to soften, they remain nearly 25% higher than their trough in April, and 6% above their level at the beginning of March.
Weekly Wholesale Auction Price Index (Mar 1 = 100)
Wholesale prices for mainstream segments declined by an average of 0.3% the week ending November 15 when compared to the prior week. Prices on the mainstream side were primarily down, however, Large and Small Car prices along with Midsize SUV prices were flat-to-up for the week by a range of 0.2% to 1.6%. Remaining mainstream segment prices fell between a range of 0.1% (Small SUV) to 1.1% (Compact Car). Premium prices performed slightly worse than their mainstream counterparts. On average, premium segment prices fell by 0.5% for the week ending November 15. Premium results were also mixed for the week. Large Premium Car and SUV segments realized respective increases of 0.9% and 0.5%, while other segments experienced losses ranging between 0.3% (Midsize Premium Car) to 1.6% (Small Premium SUV).
Despite a slowing used market, wholesale prices remain strong. Prices are expected to continue to move lower through the end of November and 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 impact of new virus outbreaks, the potential for another round of federal stimulus, overall employment conditions. Given these unknowns, a heightened degree of market volatility should be expected.
