Used Market Update: March 12, 2021
After increasing by 2.9% the week ending February 28, wholesale auction prices continued to rise during the week ending March 7. Prices improved by 2.8% for the period, which extends the streak of week-over-week price increases in the wholesale marketplace to 10 weeks. Wholesale prices have now almost returned to their highest level ever on record, nearly matching what was recorded in August 2020.
Weekly Wholesale Auction Price Index (Mar 1 = 100)
Wholesale Auction Sales Reach 85,000 Units
Wholesale auction sales of vehicles up to 8 years old reached approximately 85,000 units during the week ending March 7. Last week’s result was better than the previous week’s 82,000-unit figure. However, looking back to the same period in 2020, sales volume reached approximately 123,000 units. Last week’s result continues to emphasize how lean the wholesale marketplace is running, which is ultimately helping 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 flat to up by as much as 3% versus 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 impact of virus outbreaks, vaccine roll out, federal stimulus, employment conditions, new vehicle production constraints, as well as the ongoing semiconductor (microchip) shortage on the new side of the market. Given these unknowns, a heightened degree of used market volatility should be expected.