Used Car & Truck

Used Market Update: February 18, 2021

By David Paris

After increasing 0.9% the week ending Feb. 7, wholesale auction prices continued to rise during the week ending Feb. 14. Prices last week improved 1%, which is the strongest performance recorded since the first week of January. Last week’s result extends the longest streak of week-over-week price increases the wholesale market has recorded since August 2020, as prices now have risen for the past seven consecutive weeks. Wholesale prices are now only 6% lower than their peak in August 2020.

Weekly Wholesale Auction Price Index (Mar 1 = 100)

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Wholesale prices for mainstream segments were positive across the board for the week ending Feb. 14. Midsize pickup prices were the strongest, increasing 1.4%, while passenger car segments also saw some of the biggest increases on the mainstream side of the market, growing from 1.2% (midsize car) to 0.8% (small car). Mainstream SUV segments also experienced gains. However, they were generally smaller increases than their car counterparts. On the premium side of the market, segment prices were up across the board between 0.4% (large premium car) to 1% (small premium SUV).

Wholesale Auction Sales Reaches 83,000 Units

Wholesale auction sales of vehicles up to 8 years old reached approximately 83,000 units during the week ending Feb. 14. 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. Wholesale sales continue to run approximately 25% to 35% below 2020 levels, which is helping keep used prices strong.

Weekly Wholesale Auction Sales (000s)

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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 prices 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 and new-vehicle production constraints—especially affected by the ongoing semiconductor (microchip) shortage. Given these unknowns, a heightened degree of market volatility should be expected.

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