Used Market Update: September 24, 2020
Wholesale auction sales of vehicles up to 8 years old for the week ending Sept. 20 reached 90,000 units, which was a 14% increase vs. the prior week’s 79,000-unit figure. However, sales for the week ending Sept. 20 were approximately 12% lower than what’s typically recorded for the period.
Weekly Wholesale Auction Sales (thousands)
Segment-level auction sales on the mainstream side of the market grew by an average of 6% for the week ending Sept. 20. Increases were recorded across all mainstream segments except for large car and large SUV, which experienced declines of 1% and 2%, respectively. On the premium side of the market, sales increased 16% for the week. Similar to the mainstream side of the market, premium segment sales results were generally positive with the exception of compact premium SUV which declined 2% for the week.
Wholesale Auction Prices Down Again
After several weeks of small price declines, wholesale auction prices moved lower again the week ending Sept. 20 marking the fifth consecutive week of downward price movement. Prices for the week were down an average of 1% when compared with the previous week. As wholesale prices continue to soften, they remain 32% higher than their trough in April, and 12% 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 1% for the week ending Sept. 20 vs. the prior week. Once again, prices on the mainstream side were down across the board. In general, losses across segments were mixed and fell between 0.5% (large SUV) and 1.9% (large car). Premium prices again performed better than their mainstream counterparts. On average, premium segment prices were down an average of 0.2% for the week. While most premium segments experienced small price declines, midsize and large premium car prices bucked the trend, increasing 0.6% and 0.9%, respectively. Remaining premium segment prices fell 0.1% to 1.2%.
Despite a slowing used market, wholesale prices remain strong. Prices are expected to continue to decline through the remainder of September and into October 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.