{"id":217288,"date":"2022-01-14T13:02:00","date_gmt":"2022-01-14T18:02:00","guid":{"rendered":"https:\/\/www.thedetroitbureau.com\/?p=217288"},"modified":"2022-01-14T13:02:13","modified_gmt":"2022-01-14T18:02:13","slug":"wholesale-used-car-prices-hit-record-high-in-2021","status":"publish","type":"post","link":"https:\/\/thedetroitbureau.com\/2022\/01\/wholesale-used-car-prices-hit-record-high-in-2021\/","title":{"rendered":"Wholesale Used Car Prices Hit Record High in 2021"},"content":{"rendered":"\n

Accentuating\u00a0reports released earlier this week by Kelley Blue Book and Edmunds<\/a><\/strong>, J.D. Power reported Friday used car prices rose 40.8% in December 2021 compared with the same period a year earlier. Used vehicle prices at franchised dealers increased 3% in December from November, and were nearly 23% above prices from December 2020.<\/p>\n\n\n\n

\"\"
Wholesale prices rose 40.8% in December 2021 compared with the same month a year ago.<\/figcaption><\/figure><\/div>\n\n\n\n

A used vehicle took 41 days to sell in December 2021, down from 52 days in December 2020.<\/p>\n\n\n\n

Needless to say, demand remained unusually strong Power reports, driven by reduced new vehicle production and the resulting dealer inventory constraints. This drove new vehicle prices higher, which in turn pushed used vehicle prices higher.<\/p>\n\n\n\n

The higher prices are all the result of consumer demand as wholesale prices remined flat relative to those in November. While wholesale prices were still robust in December, it was the third consecutive month of slowing used-price growth.<\/p>\n\n\n\n

Wholesale prices fall from November<\/h2>\n\n\n\n
\"\"
Used sedans, such as this 2015 Toyota Camry Hybrid, had some the the largest wholesale price increases last month.<\/figcaption><\/figure><\/div>\n\n\n\n

Used compact and midsize cars and midsize trucks saw the largest jump in wholesale in December compared with November. As car prices continue to rise automakers have abandoned new passenger car segments that are still seeing robust demand. Wholesale prices for compact and midsize cars rose 0.4% in December 2021 vs November 2021, with large cars prices rising 0.2 percent. Only midsize pickup prices increased more, at 1.6 percent.\u00a0<\/p>\n\n\n\n

Other segments saw prices decline. Compact SUVs were down 0.3%, small cars fell 0.6%, midsize SUVs dropped 0.9%, large SUVs and midsize vans slumped 1.2%, while large pickups plummeted 1.6 percent.<\/p>\n\n\n\n

In the premium segments, wholesale prices fell in December 2021 compared to the prior month, with large premium cars declining 0.1%, large premium SUVs falling 1.2%, compact premium cars and midsize premium SUVs tumbling 1.6%, midsize premium cars dropping 22% and compact premium SUVs plunging 2.4 percent.<\/p>\n\n\n\n

Prices still high despite December\u2019s decline<\/h2>\n\n\n\n
\"\"
Small cars, such as this Honda Civic, saw the largest price appreciations in December 2021, rising 60.6% year over year.<\/figcaption><\/figure><\/div>\n\n\n\n

But one month doesn\u2019t tell the full year’s story. Mass market vehicles saw the largest price increases year over year, while premium segments still saw robust price increases, but not nearly as high. This is\u00a0because premium wholesale sales haven\u2019t been nearly as limited as mass market auction sales.<\/p>\n\n\n\n

Among mass market segments, small cars saw wholesale prices rise 60.6% year-over-year, the most of any segment, followed by compact cars increasing 52.1%, midsize vans climbing 50.2%, midsize cars escalating 48.1%, large cars were up 41.6%, compact SUVs 39.5%, midsize SUVs 37.5%, large pickups 33.2%, large SUVs 32.9% and midsize pickups 28.2%.<\/p>\n\n\n\n

Year-over-year wholesale price increases for premium segments were still sizeable, however. Compact premium SUVs saw the strongest gains, with prices increasing 34.4%, followed by large premium SUVs up 32.5%, compact premium car 31%, midsize premium SUVs 30.1%, midsize premium cars 27.1% and large premium cars 21 percent.<\/p>\n\n\n\n

Not surprisingly, wholesale volume declines<\/h2>\n\n\n\n
\"\"
Wholesale volume driopped 15% last month as a result of lower new vehicle inventory.<\/figcaption><\/figure><\/div>\n\n\n\n

Given the lower level of new car sales, it\u2019s little surprise that wholesale volume has declined as well. Wholesale sales volume was 13% lower than 2020, and compared with pre-pandemic levels, auction sales were 25%-30% lower than 2021. <\/p>\n\n\n\n

Specifically, mass market wholesale auction sales volume declined 15% year over year, while premium volume dropped just 2%, which is why their prices haven\u2019t escalated as much as mass market vehicles.<\/p>\n\n\n\n

Rising prices pinching buyers<\/h2>\n\n\n\n

According to Edmunds.com, the average monthly payment for used vehicles climbed to $520, an increase from $500 in the third quarter of 2021 and $437 in the fourth quarter of 2020. <\/p>\n\n\n\n

The escalating prices reflect the state of the new car market. The average new-vehicle transaction price rose to $47,077 in December 2021, a new record and a 1.7% increase \u2014 $808 \u2014 from November, and a 14% increase \u2014 or $5,742 \u2014 from December 2020, according to Cox Automotive\u2019s Kelley Blue Book.<\/p>\n\n\n\n

\"\"
Consumers paid $520 a month in the fourth quarter of 2021 for their used vehicle, up from $437 a year ago.<\/figcaption><\/figure><\/div>\n\n\n\n

The higher costs are being driven by the shrinking number of sedan sales, which tend to be more affordable than SUVs or trucks. Whereas the average price of a sedan in December 2021 was $42,460; SUVs averaged $46,075; vans $46,908; and trucks $55,049.<\/p>\n\n\n\n

But not all new vehicle segments saw price increases. Entry-level luxury cars and high-performance car prices dropped 1.7%, while sports car prices declined 1.9 percent.<\/p>\n\n\n\n

But overall, rising prices are increasing monthly payments. <\/p>\n\n\n\n

According to Edmunds.com, consumers shelled out an average of $636 a month for their new ride in the fourth quarter of 2021 \u2014 a new record high. That\u2019s up from $614 in the third quarter of 2021 and $581 in the fourth quarter of 2020. And buyers are increasingly turning away from leasing as OEMs have been reducing incentives. <\/p>\n\n\n\n

This explains why new vehicle lease penetration fell to 23% in December 2021, down from 31% in December 2019. Meanwhile, dealer-financed purchases are increasing, particularly among luxury brands, which saw financing penetration rising anywhere from 9%-to-19% year over year in the fourth quarter.<\/p>\n\n\n\n

But until demand begins to level off or decline, consumers can\u2019t expect relief from ever-increasing prices anytime soon.<\/p>\n","protected":false},"excerpt":{"rendered":"

TheDetroitBureau.com examines what’s behind last month’s massive rise in wholesale used vehicle prices. <\/p>\n","protected":false},"author":13752,"featured_media":217286,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","footnotes":""},"categories":[7,8,2648,1347,3332],"tags":[4400,4431,4432,4430,4429],"make":[],"post-state":[],"category_old":[],"acf":[],"_links":{"self":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts\/217288"}],"collection":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/users\/13752"}],"replies":[{"embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/comments?post=217288"}],"version-history":[{"count":29,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts\/217288\/revisions"}],"predecessor-version":[{"id":217320,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts\/217288\/revisions\/217320"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/media\/217286"}],"wp:attachment":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/media?parent=217288"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/categories?post=217288"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/tags?post=217288"},{"taxonomy":"make","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/make?post=217288"},{"taxonomy":"post-state","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/post-state?post=217288"},{"taxonomy":"category_old","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/category_old?post=217288"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}