Used Vehicle Market Takes Solid Step Toward Recovery
The used vehicle market takes a solid step toward recovery with consistent improvements in wholesale volume and prices. Wholesale auction sales remained depressed through the week ending May 3, however, sales continue to recover as key industry stakeholders come back online and dealers progressively plug holes in retail inventory. Sales exceeded 50,000 units for the week, a figure around 50% of pre-virus expectations but well above the ~80% delta versus initial expectations recorded in early April. In addition, lagging sales added an additional 14,000 units to the sales figure for the week ending April 26.
Sales totaled 100,000 over the past two weeks, approximately equaling the number of sales that occurred over the prior four-week period ending April 19. Wholesale auction sales have totaled approximately 266,000 units since mid-March, a decline of 540,000 units versus the same period in 2019, and a loss of 475,000 units versus our pre-virus expectations. However, auction volumes are continuing to improve as we progress into May.
Auction prices continue to recover as markets gradually open back up and used demand improves. As a result, wholesale auction prices improved for the second week in a row. During the week ending May 3 prices rose just under 1% on a weekly basis. A further glimmer of hope was observed in the fact that lagging reported sales lifted prices 2% the week of April 26, a 1-point improvement over initial results. Last week closed with prices down 12% versus our pre-virus forecast for the week, a sizeable improvement from the 16% trough recorded the week ending April 19.