Used-vehicle values have remained resilient into 2021, but consumer confidence has struggled to reach normative levels amid the pandemic, according to fresh data.
Used-car prices increased 1.2% month over month in January, bringing the Manheim Used Vehicle Value Index to 163.0, a 15.1% increase from the same period in 2020.
For several months, used-car prices have steadily increased, rising 0.7% in mid-January from December and 0.07% in November from October 2020.
Pickup trucks and luxury cars again led the industry in used-car prices in January, while all market segments logged seasonally adjusted price increases, according to Manheim.
While prices rose, used-vehicle sales declined 5% year over year in January, with the used-retail SAAR estimated at 20.8 million units, up from 20.2 million in December 2020, but remaining below the 21.2 million from a year ago.
Tight supply is contributing to higher prices: January saw used-vehicle retail inventory fall to 39 days, down from the industry norm of 44 days’ supply, according to vAuto data. Wholesale supply at the month’s end sat at 25 days, up from the normal 23.
Meanwhile, new-vehicle sales declined 3.7% YoY, and the January SAAR was estimated at 16.6 million, up from 16.2 million the previous month, but down from 16.9 million in January 2020. New-car inventory fell 21% YoY to 2.8 million units.
The COVID-19 pandemic continues to weigh on consumers, contributing to a 0.4% decline in spending on all goods in the fourth quarter, even as spending on services increased 4%, according to Manheim. The nation’s real gross domestic product declined 2.5% YoY in the fourth quarter and 3.5% at yearend 2020 — the worst levels since 1948, Manheim reported.
Still, consumer confidence increased 2.5% in January, but remained 32% below last year’s level, according to the Conference Board, a global nonpartisan think tank. More consumers planned to purchase a car in the next six months than in December, but fewer than at the start of 2020.
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