Used Auto Retail Prices Demonstrate Resilience, Approaching Pre-COVID-19 Projections; Used Auto Sales Volumes Continue to Recover
By: J.D. Power
"Retail prices of used vehicles are now down only 3% from pre-virus levels," reports Jonathan Banks, VP Vehicle Valuations & Analytics, Valuation Services at J.D. Power. "Meanwhile, direct-to-dealer prices are essentially unchanged for the fourth consecutive week. Prices of used cars are exhibiting sustained stability and are now down 6% compared with early March, prior to the downturn."
Used retail prices are exhibiting behavior that is typical for the time of year, while wholesale prices increasingly reflect a market that is returning to a state of normalcy. Wholesale prices are currently 5% below the pre-virus expectations as the market works through an environment of reduced supply and demand.
"That said, J.D. Power expects wholesale prices to remain on course to recover as stay-at-home orders are lifted and markets reopen," Banks says.
Wholesale Volumes Steadily Recovering
While auction sales remain below pre-virus levels through the week ending May 17, they continue to recover as physical auction activity steadily approaches pre-virus performance.
Wholesale auction sales reached 86,000 units for the week ending May 17, 18% below pre-virus expectations. This is a significant improvement from the 70% loss recorded at the bottom of the market in April.
"In addition, we added approximately 13,500 units to the tally for the week ending May 10 as post-deadline sales were reported," Banks says. "Wholesale prices posted an improvement for the fourth week in a row, rising 2%. Prices have grown 8% during the past four weeks and are now down just 5% from our pre-virus forecast. The used-vehicle market has come a long way since April 19 when prices were down by a whopping 16%," Banks says.
From a segment perspective, mass market passenger car prices are experiencing some of the largest increases in the industry after several weeks of declines. Passenger car prices in this segment are up between 12%-14% from their low point in April.
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