Used Market Update: October 23, 2020
Wholesale auction sales of vehicles up to 8 years old for the week ending Oct. 18 remained relatively flat at 80,000 units. Last week’s result marks the third consecutive week that sales were flat-to-down slightly. Ultimately, sales for the week ending Oct. 18 were approximately 20% lower than what’s typically recorded for the period. Segment-level auction sales on the mainstream side of the market were down slightly for the week. Across segments results were mixed, midsize pickup sales were down nearly 8% while, on the opposite end of the spectrum, midsize van sales were up 4%. On the premium side of the market, sales were generally positive. The only segments that experienced losses were premium small car, compact car and small SUV.
Weekly Wholesale Auction Sales (thousands)
Wholesale Auction Prices Down Again
After several weeks of small price declines, wholesale auction prices moved lower the week ending Oct. 18, marking the ninth consecutive week of downward price movement. Prices last week were reduced an average of 0.9%. As wholesale prices continue to soften, they remain 28% higher than their trough in April, and 9% 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% for the week ending Oct. 18 when compared with the prior week. Prices on the mainstream side were generally down, though large SUV prices increased 0.3%. Results for all other mainstream segments were negative with prices falling between 0.5% (large pickup) and 2% (midsize van). Premium prices again performed slightly better than their mainstream counterparts. On average, premium segment prices fell 0.3%. Premium results were mixed as large premium car prices increased nearly 2% while small premium car prices declined nearly 2%. Generally, premium segment price changes for the week were flat or down approximately 1%.
Despite a slowing used market, wholesale prices remain strong. Prices are expected to continue to move lower through October and into November 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 COVID-19 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.