Used Market Update: October 16, 2020
Wholesale auction sales of vehicles up to 8 years old for the week ending Oct. 11 remained unchanged at 78,000 units. Last week’s result marks the fifth consecutive week that sales failed to surpass the 80,000-unit threshold. Ultimately, sales for the week were approximately 19% lower than what’s typically recorded for the period. Segment-level auction sales on the mainstream side of the market were essentially flat for the week. In general, mainstream passenger car sales were lower than their SUV counterparts. On the premium side of the market, sales were flat for the week.
Weekly Wholesale Auction Sales (thousands)
Wholesale Auction Prices Down Again
After several weeks of small price declines, wholesale auction prices moved lower again the week ending Oct. 11 marking the eighth consecutive week of downward price movement. Prices last week were reduced an average of 0.4%. As wholesale prices continue to soften, they remain 29% higher than their trough in April, and 10% 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 0.4% for the week ending Oct. 11 when compared with the prior week. Prices on the mainstream side were generally down, however, large SUV prices increased 0.7% and midsize van prices grew a slight 0.1%. Results for remaining mainstream segments were negative, as prices fell from 0.1% (large car) to 1.8% (small car). Premium prices once again performed slightly better than their mainstream counterparts. On average, premium segment prices were flat for the week. Premium results were mixed, car segment prices were generally positive with prices increasing from 0.3% (compact premium car) to 1.8% (large premium car). SUV prices were predominantly flat to down slightly.
Despite a slowing used market, wholesale prices remain strong. Prices are expected to continue to move lower through October and into November 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, overall employment conditions. Given these unknowns, a heightened degree of market volatility should be expected.