Used Market Update: November 12, 2020
Wholesale Auction Sales Reach 80,000 Units
Wholesale auction sales of vehicles up to 8 years old for the week ending Nov. 8 fell slightly reaching approximately 80,000 units. Last week’s result marks the second consecutive week of slowing sales after four weeks of flat sales. Ultimately, sales for the week ending Nov. 8 were approximately 19% lower than what’s typically recorded for the period and a 2% decline week over week. Segment-level auction sales on the mainstream side of the market were mixed for the week ending Nov. 8. Across segments, sales volumes continue to drift lower across the board.
Weekly Wholesale Auction Sales (thousands)
Wholesale Auction Prices Down For 12th Consecutive Week
After several weeks of price declines, wholesale auction prices moved slightly lower again the week ending Nov. 8 marking the 12th consecutive week of downward price movement. Prices last week were reduced an average of 1% and have declined 8% since their peak in August. As wholesale prices continue to soften, they remain 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 an average of 0.9% the week ending Nov. 8 when compared with the prior week. Prices on the mainstream side were generally down, however, large pickup and SUV along with midsize Van prices were flat for the week. Remaining mainstream segment prices fell between 0.4% (small SUV) to 1.8% (midsize and small car). Premium prices performed slightly worse than their mainstream counterparts. On average, premium segment prices fell 1.2%. Premium prices were down across the board. Losses ranged between 0.2% (compact premium car) and 2% (large premium car).
Despite a slowing used market, wholesale prices remain strong. Prices are expected to continue to move lower through the remaining weeks of November and December as pent-up demand has been satisfied and pandemic-related macro-economic headwinds increase. By year's end, prices are expected to be 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 effect of new virus outbreaks, the potential for another round of federal stimulus and overall employment conditions. Given these unknowns, a heightened degree of market volatility should be expected.