Wholesale prices for used cars and trucks — a leading indicator for consumer used-vehicle prices — are still through the roof due to continued high demand and low supply, according to the latest monthly report from used-car auction firm KAR Global.
“The average price of a vehicle sold at physical auctions is now more than $5,000 higher than this same time in pre-pandemic 2019,” said Tom Kontos, chief economist for KAR Global, which is based in Carmel, Ind.
The high demand includes demand from rental-car fleets, which are adding to their fleets again, to meet a recovery in demand due to increased travel Kontos said.
Used-vehicle supplies are low, especially for newer models, because pandemic related shutdowns depressed auto production last year, followed by a computer chip shortage this year. Fewer new vehicles means fewer used vehicles down the line.
The new-vehicle shortage is also driving demand higher for used vehicles, because many new-vehicle shoppers are switching to used cars, when they can’t find the new make and model they want. In addition, as high as used-vehicle prices are, new-vehicle prices are even higher, well over $40,000 on average, according to J.D. Power.
For the second month in a row, wholesale, used-vehicle prices at physical auctions were above an unprecedented $16,000, KAR Global’s Kontos said in a pre-recorded webinar posted Nov. 30.
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