LAWRENCEVILLE, Ga. -

Used-car managers might agree with the description Black Book gave the 2021 wholesale market, calling it a “wild ride” in the first installment of Market Insights for the new year released on Tuesday.

During a year of record-breaking value increases, Black Book noticed that “wild ride” came to a close during the week that included New Year’s Day with prices edging a bit lower as well as sales rates dropping with “buyers stepping back from the high floors set by the sellers.”

Analysts noted in the newest report that the weekly estimated average sales rate dropped “dramatically” to 60% after rising as high as 75% in April and staying at or above 70% for much of September and October.

Black Book looked to provide some historical context to what happened in 2021.

“Calendar year 2020 ended with used wholesale prices at elevated levels,” analysts said. “With economic patterns (including the automotive market) driven by the pandemic, normal seasonal patterns (e.g., 2019 calendar year) in the wholesale market were not observed for most of the year. We saw a similar picture in 2009 at the end of the Great Recession.

“Calendar year 2021 has not had typical seasonality patterns as the market has had rapid increases in wholesale values for the majority of the year,” Black Book continued. “After reaching record heights at the end of June, wholesale prices began to decline at a rate higher than the typical seasonal decline through July and most of August. As we moved into the fall season, wholesale prices began to show positive movement once again.

“As calendar year 2021 has ended, wholesale prices started to stabilize, however still at noticeably elevated levels compared to prior calendar years,” analysts added.

And for managers in charge of dealership inventory, the 2021 wholesale scene was a challenge even for the most experienced buyers. Black Book set the scene as the year wound down.

“Generally, in the fourth quarter, auction lanes can be exciting, with incentives and plenty of inventory to choose from,” Black Book said. “As 2021 came to a close, auction lanes were a drastically different environment. A lack of lease returns, rentals, and repossessions has made for an extremely scarce market leading to high floor prices and hesitant buyers, fearful of being left holding the bag on high priced inventory.

“Hopefully, as we head into the new year, new-vehicle inventory will begin flowing back in so there is some sense of normalcy,” Black Book added.

For now, prices are still high as the December Black Book Used Vehicle Retention Index approached 200. Depending on what your store needed, analysts spotted a couple of brighter spots on the value front in the last week of the year.

Black Book pointed out that prices for compact cars decreased for the fifth consecutive week to finish 2021, sliding 0.20% after the prior week’s decline of 0.32%.

Analysts noticed that values for sub-compact crossovers (down 0.14%) and compact crossovers (down 0.31%) softened, too, on a volume-weighted basis.

Conversely, certain vehicles in high demand still are generating higher prices.

Black Book indicated values for midsize cars now have increased for 20 consecutive weeks, producing an average weekly rise of 0.59%.

And if a dealer’s potential buyer needed a van, managers had to scramble for the floorplan funds to get one, especially full-size vans, which now have risen in price for 48 of the past 49 weeks after another jump of 0.41%.

Black Book added that values for compact vans and minivans, also increased at 0.28% and 0.49%, respectively.

Analysts shared a couple of other notes to wrap up their first update of 2022, turning attention to the retail side.

“Used retail listings ended at the lowest point recorded throughout year, around 16% below where 2021 started,” Black Book said. “As we head into 2022, we can hopefully only go up from here, as dealers start preparing for spring market.

“Days-to-turn for used retail listings slightly increased over the last few months of 2021,” Black Book added. “Now in 2022, days-to-turn sits just above 38 days.”