Used Car & Truck

Used Market Update: December 18, 2020

By David Paris

After a slight increase the week ending December 6, wholesale auction prices declined during the week ending December 13. During the week ending December 13 prices declined by an average of 0.5%, which essentially matches the 14 consecutive average week-over-week price movement recorded leading into the Thanksgiving holiday period. Wholesale prices are now 23% higher than their trough in April, and 5% above their level at the beginning of March.

Weekly Wholesale Auction Price Index (Mar 1 = 100)

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Wholesale prices for mainstream segments declined by an average of 0.4% the week ending December 13 when compared to the prior week. Prices on the mainstream side were generally down, however, Large Pickup and Large SUV prices increased by respective figures of 0.3% and 0.5%. Segment prices didn’t perform quite as well as mainstream vehicles, as a result prices declined by an average of 0.6% for the week ending December 13. Premium results were mixed, however, like their mainstream counterparts, Large Premium SUV prices were up by nearly 0.5% for the period.

Wholesale Auction Sales Hold Steady

Wholesale auction sales of vehicles up to 8 years old for the week ending December 13 were relatively flat reaching approximately 80,000 units. Last week’s result nearly matches which is right in line with what we’ve seen weekly since September. Now looking back to the same period last year, sales reached 110k units, as wholesale sales continue to run approximately 25% to 30% off prior year’s levels.

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Through the end of the year, prices are expected to continue to move lower 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.

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