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Used Market Update: March 26, 2021

By David Paris

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)

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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)

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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.

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