Used Market Update: March 26, 2021
After increasing 2.5% the week ending March 14, wholesale auction prices increased an even better 3.1% during the week ending March 21. The week’s exceptional performance extends the streak of week-over-week price increases in the wholesale marketplace to 12 weeks. Wholesale prices are now 5.4% greater than their previous peak back in August 2020.
Weekly Wholesale Auction Price Index (Mar 1 = 100)
Wholesale Auction Sales Reach 94,000 Units
Wholesale auction sales of vehicles up to 8 years old reached approximately 94,000 units during the week ending March 21. Last week’s result was better than the previous week’s 88,000-unit figure and marked the most units sold in a single week since late August 2020. While sales are improving, they continue to run approximately 25% to 30% below 2020 levels. 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% vs. 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 effect of vaccine roll out, federal stimulus, employment conditions, new-vehicle production constraints, as well as the ongoing semiconductor (microchip) and other supply chain issues on the new side of the market. Given these unknowns, a heightened degree of used market volatility should be expected.