A 25-year first: Wholesale prices climbing in October
This month marked the first time in 22 years that the Atlanta Braves have reached baseball’s World Series.
But the historical milestone the used-car industry is likely to reach in October goes back even further.
“The used-vehicle market continues to buck historic seasonal trends and exhibit great strength as the industry moves deeper into the fall selling months,” Jonathan Banks, J.D. Power’s vice president of valuation services, said in an analysis. “Wholesale prices are expected to close out October up by more than 4%, on average, and this will mark the first-time used prices have increased for the period in the last 25-plus years.”
Part of what’s driving used-car prices over the wall is that the pre-owned vehicles are having to pinch-hit for a depleted supply of new vehicles.
And it’s not likely the market will soon find relief.
“The importance of used vehicles continues to progress as both dealers and consumers alike turn to pre-owned to help fill in the gaps created by current new-vehicle production and distribution constraints,” Banks said.
“Moving into November, expect used prices to remain near all-time highs as competition in the wholesale marketplace remains fierce due to lower levels of available units flowing through auction lanes and industry challenges remain in place.”
The astronomical used-car prices this year don’t necessarily mean the market is in the trash can, but 2021 may call for an asterisk in the record books.
And on the retail sales side, TrueCar is calling for 3.5 million used-car sales for October, which would beat year-ago figures by 5%, though they would trail September by 2%.
Loan terms on used vehicles averaged 70 months in October, with interest rates averaging 7.3%, TrueCar said.