Used Market Update: January 22, 2021
After increasing 0.8% the week ending Jan. 10, wholesale auction prices continued to rise during the week ending Jan. 17. Prices last week improved 0.5%, extending the longest streak of week-over-week price increases in the wholesale market since August 2020. Wholesale prices are now 23% higher than their trough in April 2020, and 5% above their level at the beginning of March 2020.
Weekly Wholesale Auction Price Index (Mar 1 = 100)
Wholesale prices for mainstream segments were generally positive for the week ending Jan. 17. Small and compact car prices were the strongest, with prices increasing 1.8% and 1.2%, respectively. Mass market SUV segments also recorded price increases as prices of utilities grew from 0.6% (small SUV) to 1.2% (large SUV). Remaining mass market segment prices were essentially flat, except for the midsize van segment which fell 0.4%. On the premium side, prices weren’t quite as strong as their mass market counterparts. However, price movement was generally positive again.
Wholesale Auction Sales Reaches 87,000 Units
Wholesale auction sales of vehicles up to 8 years old reached approximately 87,000 units during the week ending Jan. 17. Last week’s result was the highest level on record since November 2020 returning to the pre-holiday level observed over the fall selling periods. Looking back to the same period in 2020, sales volume reached nearly 115,000 units during the first week of 2020. Wholesale sales continue to run approximately 25% to 35% below 2020 levels, which is continuing to help 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 and the recent change in administration. Given these unknowns, a heightened degree of market volatility should be expected.