Kontos: Wholesale Prices Trend Up

By Staff Writer March 30, 2021
KAR Global Chief economist Tom Kontos KAR Global Chief economist Tom Kontos

Wholesale used vehicle prices climbed further in February with average values up significantly over January and by double-digits in percentage terms over pre-COVID levels, according to the February 2021 Kontos Kommentary.

The analysis from KAR Global Chief economist Tom Kontos shows these trends continued into the first two weeks of March, which were the final weeks last year not significantly impacted by the pandemic.

Tight supply and strong demand continue to drive wholesale prices and conversion rates to historically high levels, Kontos reported. Retail used-vehicle sales were somewhat soft in February, but dealers appear to be stocking up for a strong spring market boosted by stimulus money as well as tax refunds.

According to KAR Global Analytical Services’ monthly analysis of wholesale used vehicle prices by vehicle model class, wholesale prices in February averaged $13,240 — up 5.5 percent compared to January, up 22.9 percent compared to pre-COVID/February 2019 and up 16.8 percent relative to February 2020.

Based on NADA data, retail used vehicle sales by franchised and independent dealers were down 3.7 percent month-over-month and 18.9 percent year-over-year in February. CPO sales were up 4.3 percent from the prior month but down 12.4 percent year-over-year, according to figures from Autodata.

When holding constant for sale type, model-year-age, mileage, and model class segment — using criteria that characterize off-lease units — prices were up about 10 percent on a year-over-year basis for both midsize cars and midsize SUV/CUVs in February.

Trends in average prices by major vehicle type by week through mid-March prices have been well above year-ago levels each week since the start of the year, regardless of vehicle type.

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Last modified on Tuesday, 30 March 2021 12:44