Crazy Times Not Only for Consumers Trying to Buy a Used Car but also for Dealers Grappling with the Distortions

Retail prices of used cars & trucks spiked most since 1969 despite lower sales and plenty of supply. Wholesale prices, after biggest spike ever, are already falling.

By Wolf Richter for WOLF STREET.

Prices of used cars and trucks have been on one heck of a crazy ride since the Pandemic started, with the market freezing up in March and April, and then heating up, with prices soaring but with demand and sales volume still not back where it was before the Pandemic. This – what would normally be contradictions – makes you shake your head.

Retail prices of used cars and trucks in September soared 6.7% from August, the biggest month-to-month jump since February 1969, according to the Consumer Price Index for September, released today by the Bureau of Labor Statistics.

This brought the three-month jump (July, August, September) to 15.1%. I checked the data back to 1984, and this was by far the biggest three-month jump. Even during the Cash-for-Clunkers program – when a whole generation of serviceable and affordable used vehicles were taken out the back and summarily shot to boost new vehicle sales during the Financial Crisis – the three-month price increases topped out at 9.2% at the end of 2009:

And what’s even weirder is that this three-month record-breaking blistering-red-hot increase of the CPI for used vehicles occurred even though used vehicle retail sales volume in those three months remained below the levels a year earlier, according to estimates by Cox Automotive.

But wholesale prices have turned the corner.

A few days ago, we looked at used vehicle wholesale prices – based on industry data, not government data. The entire used vehicle wholesale market has been on a roller-coaster ride where auction prices in late spring and summer spiked into the stratosphere in a manner never seen before, with wholesale prices of pickup trucks skyrocketing an astounding 26% from a year ago, according to J.D. Power. But then prices topped out in August. On a weekly basis through early October, wholesale prices have declined nearly 5%, though they still remain above Pandemic levels.

Except for three weeks during those seven months, wholesale volume – the number of vehicles sold at auctions per week – has remained below pre-Pandemic levels which during the Good Times ranged between 110,000 to 115,000 vehicles per week. Over the four weeks through October 4, weekly sales volume averaged only about 75,000 vehicles per week.

There is plenty of supply – with rental car companies now trying to defleet, as their airport business is still just a small fraction of what it used to be.

The vehicles that Hertz was trying to unload were stuck in bankruptcy court for the summer, but a settlement with creditors was reached at the end of July, and then in August, some of those 200,000 or so vehicles started heading toward the auctions. The plan is to sell all of them by year-end. The arrival of the Hertz units in August may have been one of the reasons for the downward move in prices starting in late August.

Wholesale supply was 26 days at the end of September, higher than the normal 23 days, according to Cox Automotive. This supply does not include vehicles that are sitting on a lot at a rental car company or leasing company, waiting to be sent to auction. And there is a lot of that.

When will the decline in wholesale prices show up in used-vehicle CPI?

There is a lag between wholesale price data, as reported by the industry, and government data of retail prices collected monthly. Wholesale prices started spiking in late April. On a monthly basis, the price increases showed up in May. Retail prices as reflected in the CPI started spiking in July. So about two months behind.

Wholesale prices started losing steam, on a weekly basis in late August, and on a monthly basis, in September. So if the lag remains roughly the same (two months), we might see the first declines in the used vehicle CPI in November.

There is plenty of retail supply on average across the US.

At the end of September, there were 42 days’ supply on dealer lots, just a tad lower than average (44 days), according to Cox Automotive estimates for dealers across the US.

What you will find when you shop at dealers in your area is another story that might not match national averages, depending on numerous factors, including how much competition there is, what the dealer is willing to do, and what vehicle you’re looking for. What you will find may range from over-abundance to shortage. And this will also impact pricing.

So keep your eyes open and shop around. These are truly crazy times, not only for consumers looking for a deal on a used vehicle, but also for dealers struggling to make sense of these historic distortions.

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  82 comments for “Crazy Times Not Only for Consumers Trying to Buy a Used Car but also for Dealers Grappling with the Distortions

  1. David Hall says:

    Is this a harbinger of inflation, or people avoiding public transportation and ride sharing?

    • Solomon says:

      Yes, people are probably buying used cars in order to work for Uber/ubereats or those alike; so, they raised the prices on the already struggling masses just trying to make ends meet. Profit over everything! If they cant afford the artificially inflated prices, it’s not anyone’s fault but their own! Gosh who thinks like that? Oh right, all of NATO. What a miserable fucking society we have created. Good night.

      • endeavor says:

        Every retail seller is getting good at the false scarcity game to jack up prices.

        • Joe Saba says:

          my 2001 truck has another 10 years left in it
          tires and maintenance – and tags and insurance far CHEAPER

        • Joe Saba says:

          and to think the STATES don’t need bailout since they tend to reap well over $1,000 for each new vehicle in sales tax than throw in another $1,000 for tags EACH YEAR
          States have plenty of revenue – no need for bailouts

    • Engin-ear says:

      Here comes the Age of Volatility.

      First in personal and business income.

      Then in perception of the Cash: is it Trash or King?

      Then in sudden obligations to sell some assets at discount prices. Some economic players hide their CashFlow forecasts, some can’t forcast and some don’t know the concept at all.

    • chris hauser says:

      it occurs to me maybe it’s the grade of car on lots……..

      suddenly i see quality used cars on lots……

  2. BuySome says:

    Shopping used is not a time to wear Sunday go to meeting finest. Get grubby, lay on your back, and have. a good hard look at that underside and all those places where things can go wrong. If you don’t trust bankers, why trust a salesgeek who will be gone befire the month is out?

  3. Cas127 says:

    Alternative theory…prices up *because* transaction volumes down (aka sales mix effect a la housing).

    To exaggerate, if the plebian 90% of the auto buyer mkt is too scared to pull the trigger but the 10% carriage trade isn’t, the average transaction price is likely to go up.

    Same dynamic is why Case Shiller was developed to “match” home sales data over time, using same houses. The point was to offset “product mix” effect on median sales prices.

    But this apparent deviation from std demand/supply models does suggest that car buyers are craven price takers rather than hard bitten hagglers…if you can’t beat up a dealership during a pandemic sales collapse, you are never going to.

  4. Seneca's cliff says:

    The “auto row” in the west side burbs of Portland had a dozen or so small independent used car lots before covid. I drove that way today and only about 2 of those independent lots are left. Could this shakeup of the the “little guys” in the used car business have anything to do with weird things in used car volumes and prices.

    • Sam says:

      Vancouver[wa] side: LOTS of new iron not moving.
      A repair shop that handles upscale used car dealer work (and dwnscale for gypsy wholesaler’s) have not heard from any of them in months.
      Civilian work is lined up outside the door. And more arriving.
      The detail shop nxt door is working overtime on new car trade-ins, the quality level (of said trade-ins) are what new car dealers use to wholesale.

      • JRHill says:

        Up stream in the Gorge, pickups have always been a hot commodity due to ag, timber, snow/ice and rural needs. I recently ordered a new pickup because the used stuff was too expensive. However, my old pickup wasn’t worth anything for trade in. It’s quite the game. But working with dealerships always has been that way.

  5. seb says:

    this entire COVID economy is bizarre…

  6. 2banana says:

    It’s been a bizarre economy ever since the bailouts of 2008, QE and ZIRP.

    That’s 12 years of insanity.

    What should have been a sharp and short recession has been papered over ever since.

    • John says:

      So true , best comment yet !

    • Cas127 says:

      It has been an f-upped economy since the early aughts, when China was allowed into the WTO, yet freely allowed to engage in domestic macroeconomic manipulation designed to defeat reciprocal economic trade (mandatory conversion of exporters’ USD proceeds into CCP controlled Yuan, currency export controls, direct FX rate manipulation, interest rate suppression of domestic Chinese savers – at cost of higher inflation – in order to subsidize Chinese industrial capacity, etc).

      China has been exposing the DC f*ck wits for what they are for nearly two decades.

      But because it would take 5 minutes to explain the details, the State designated MSM news sphincters find it beyond their capability to explore.

      For 20 years.

      Like ZIRP.

  7. Michael Engel says:

    1) Since Oct 2019 the used cars retail market have shrunk and squeezed like a coil.
    2) Between Feb 2020 and June 2020, the captive retail buyers suffered starvation.
    3) It popped like a spring in July, Aug and Sept to a new all time high,
    while wholesale prices kept falling since Aug last year.
    4) There is V shape recovery in the retail used car market and the stock markets.
    5) Willshire 5000 stock market cap, have reached a new all time high,
    thanks to 5G and Bezus $220B.
    6) Adjusted to 1980 dollars, the cap have to be multiply by a factor of 1.19. Since WLSH is daily and the GDP is quarterly, I roughly estimated the average price for each quarter. The 2000 all time high was 1.69.
    7) My numbers :
    — Q4 2019 : 31 x 1.19 / 21.75 = 1.69.
    — Q1 2020, during the plunge : 28.7 x 1.19 / 21.5 = 1.58.
    — Q2 2020, during the V shape recovery : 30 x 1.19 / 19.5 = 1.83.
    — Q3 2020 an optimist est : 33.8 x 1.19 / 21.5 = 1.87.
    8) While there is a V shape recovery in many markets, the unemployment is 6.9%, a lower high.
    9) 2020 is totally crazy. Without full employment there will be no inflation.

  8. MCH says:

    Wolf, what does this mean for the new car market? Do you think?

    I am assuming prices will drop, but is that even a reasonable assumption given that used car pricing is potentially supporting new car prices?

    • Wolf Richter says:

      I think longer term, what will really change the new vehicle market is the arrival of EVs. They’re so much cheaper and simpler to manufacture. The battery is hard, and auto makers don’t own the cell tech, though they control the rest of the battery and the software. Battery prices are coming down too.

      Since EVs require so little maintenance, the auto service segment will also change.

      Because of the simplicity of EVs, where every single component can be made by suppliers, and the fact that the battery can be bought from suppliers too, the doors have opened for new entrants, new competition. It won’t be long before EVs will be cheaper than equivalent ICE vehicles. Look at Tesla… been cutting prices all year, now that nearly every automaker is making EVs.

      This will be a huge and brutal change for the industry – including lots of layoffs.

      • John says:

        Wolf , love your site . Car salesmen are like realtors , they have to lie to get someone to sign on the line to get paid regardless if the customer can afford it. This kind of old school salesmanship has got to die for good.

        • Gian says:

          The Realtor does not determine what a “customer” can afford. The lending institution tells their customer what they can afford. Buyers are prequalified by lenders, Realtors merely show them properties they are qualified to purchase. Your ignorance on this process is stunning.

      • MCH says:

        I think this is a situation where the value position is going to be changed at some point. Perhaps the integrators such as Ford and BMWs of the world may no longer matter.

        After all, the ICE is really the key component for the integrator. But if that goes away, where does the key part of the value reside? Does Ford become a mobility company focused on supplying autonomous taxis?

        If you look at the supply chain, it may end up that the critical supplier becomes the lithium miners… one wonders where that money is going to be made, and how the value will be captured.

        • Dan Romig says:

          With poetic license from the end of ‘The Good, the Bad and the Ugly’
          “You see, in this world there’s two kinds of people, my friend: Those who want to drive from point A to point B. For them we have the Ford Taurus, but how they bore us. And those who want to enjoy driving from point A to point B. For them we have the BMW M4, which they’ll always want to drive some more.”

          This will play out in the EV market too. Nissan LEAF or a Porsche Mission E?

      • MCH says:

        A separate comment on layoffs. And it seems inevitable, but as the industry changes and more automation comes in, it’ll eventually mark the end of the UAW as well. And that would be sad. Because unions are sorely needed to protect the rights of blue collar workers, and possibly even white collar workers in the long run.

        The difficulty for unions in the long run is the following. Unlike businesses, it’s hard for the unions to innovate, for unions, the best thing possible is status quo. Any change to the existing way of doing things is a threat. But it is inevitable, if they don’t accept changes, eventually, the company they are working for would die, and they’d all be without a job.

        • nodecentrepublicansleft says:

          Ever hear the story about the folks in Tennessee working for VW?

          They voted against having a union, so an executive VP from VW flew to TN to meet with them. He said:

          “Listen, you’re voting against your own interests. Collectively (a UNION), you can bargain. Individually…you can BEG.”

          I also know a woman who was fired from her job of 20 years because she got breast cancer. A long time fox “news” viewer, she told me “Unions aren’t really needed anymore.” My jaw hit the floor….

          We move backwards in the USA…..

        • MCH says:

          That’s exactly the point, there needs to be a union. But by themselves, the union are attempting to guard the status quo, and essentially pushing for as little change as possible or ideally going back to the good old days. (at least it seems that way in the US).

          If you consider for example the UAW. Their ideal situation is going back to the 70s, where they held more power, and technology hasn’t progressed till where it is today. That isn’t possible, a combination of technology and changing market dynamics is going to seriously hurt these guys. But by their nature, they aren’t able to simply advance, because they are too dependent on the market and the company in question. They have no way of make surfing with the wave if you will.

          Seriously, does anyone expect the UAW to get stronger as the years go on and as manufacturing become increasingly more automated. Yet those unions are definitely needed to protect blue collar rights going forward. What they ought to do is to go after white collar workers.

        • Happy1 says:

          Unions ultimately devour the industries they dominate because they hold the industries hostage to above market costs. They do NOT protect blue collar workers, they ensure that there will be fewer of them (in the US that is).

      • kevin says:

        Whole-heartedly agree with Wolf on this point. EVs will change the entire face of the automobile market, like the way iPhone did when it was first introduced. It will eventually force changes in the shipping and airline industry (with electric container ships & electric airplanes) and possibly dismantle large sections of the petroleum production and distribution industry.

        I tell my nephews don’t do mechanical engineering but rather do electrical or computers instead ‘cos car mechanics will become obsolete over the next 20 years. Good riddance for these criminal accomplices of car salesmen. lol.

        Tree-huggers don’t rejoice too early though… Oil & Gas will never go away completely, because they are still be required for plastics, paints, lubricants and medical applications. Converting all your power stations to use natural gas (the least worst option among fossil fuels) will take a long time too, so EVs plugging into the grid could actually cause MORE pollution over the short-term, until we can change the source fuel used for our power stations.

        It will interesting to see if car PLATFORM (i.e. battery chassis & wheelbase) makers will become the new platform owners to dominate the ecosystem just like how internet platforms Google and Android forces the rest of the market to conform to them.

        I, like many, am still waiting patiently for (used & new) ICE auto prices to collapse over the next 10 years when no one will buy these obsolete products anymore. If they do, I might just buy the last version of some ICE brand vehicle, perhaps just for nostalgia. :)

        Wolf’s insights on the timeframe for this transition would be most valuable given his extensive experience in the car business.

        • Jos Oskam says:

          “…I tell my nephews don’t do mechanical engineering but rather do electrical or computers instead ‘cos car mechanics will become obsolete over the next 20 years…”

          I call BS. I’m a mechanical engineer and neither I nor my friends and fellow graduates have been near the mechanics of a car except to drive it.

          You might want to open your eyes, look around you, and realize that you’re surrounded by mechanisms that have been designed and realized by mechanical engineers. From bicycle bells to tower cranes and whatever in between.

          All this “computer and electrical” stuff that everybody and your nephews is working on is mostly useless without mechanisms. Mechanical engineers will earn a good living as long as movement exists.

        • kevin says:

          Oh Gosh… Jos Oskam, I’m sorry for dissing on you(r) Mechs.
          That statement was made half in jest in reference to those car mechanics that charge me an arm & a leg for simple maintenance.

          In any case, I’m just saying there will be more flexible and better paying job opportunities as whole industries move towards electrification, virtualization and adoption of AI / software.

          Key word is flexibility in your chosen profession, and mechanical fields will be less able to capture these trends – unless Boston Dynamics picks up the pace with bipedal robots that can replace plumbers, waiters or your butler. And even then, the critical core of robots will still be their AI/software.

          With the ongoing pandemic, more work then ever will be virtualized, and actually there will be less need for “movement” of people. Good or bad, this is the new normal.

          So no offence meant and yes, I understand mechanical designers are still required in many areas of life… just advising my nephew, and the next generation in general, to position themselves accordingly.

          Coming back to the auto sector, this is an interesting article of the development of auto as a platform, literally. This will imply little to no work for car mechanics since the electric drivetrain is mostly embedded and the there are far lesser gears and moving parts in an EV compared to the ICE. Think about all the downstream impacts to suppliers, jobs and companies still wedded to ICE engines.

        • Dan Romig says:

          The funny thing is that my new bicycle is both an electrical and mechanical piece of engineering excellence.

          A century ago, my grandfather raced on the velodromes just as I did thirty years ago and our bikes were not much different. But my road bikes from when I raced to my new one are quite different.

          The first thing I fell in love with when test riding the new machine was the 12 speed wireless shifting. This is not advanced Elect. engineering, but it works much nicer than the mechanical paddle-shifters of my ten year old machine.

          Jos makes a good point about mechanisms designed by mechanical engineers, and everything about my new ride is simply the best from aerodynamics to power transfer to ride quality!

          kevin’s point is also valid, and look at the Mercedes Formula 1 power train to see the future. With over 50% thermal efficiency, achieved by the combination of electronics and mechanics, it is the most advanced technology available today.

          My orthopedic surgeon replaced a hip last year. He also helped design the components that are in my body. In a few weeks, he will replace a knee. What does he drive? Porsche 911. Why? “Because I like well engineered machines, and I drive a manual since I like to shift by hand.”

          Now, what’s that quote from the Allstate commercial again?

        • R Hughes says:

          ME’s generally follow two routes; machine design or process. The later whether HVAC, boilers, fluid or gas transport, chem process and so forth require mechanicals for design, retrofit or maintenance. Even a chip fab plant; think class 1 clean rooms, chem transport, vapor deposits, waste water streams treatment.

          So please don’t short change ME’s too quickly. Only touched on a few of the things we design.

        • Happy1 says:

          The impending death of the internal combustion engine is greatly exaggerated. Check back in 10 years. EVs will still be a niche player. Batteries have to get vastly cheaper, by an order of magnitude.

        • Wolf Richter says:


          You need to look at reality, which is the tens of billions of dollars the entire industry is investing every year in converting manufacturing to EVs, the biggest automakers, the smartest people in the industry. EVs are so much cheaper to manufacture. Tesla has been cutting prices all year, and it just cut again. This is happening everywhere. Prices are coming down because mass production has been started by smart automakers and competition is now taking place. Tesla no longer has a monopoly. It now needs to compete — meaning on price, hence the price cuts.

          Look under the hood of an EV. Heck, Tesla has a luggage compartment under the hood. Drive one. Then check how simple they are. They’re inherently efficient in stop-and-go traffic in part due to their regenerative breaking. Anyone can build an EV… suppliers provide all the components, including the battery. You just have to come up with a design. This is commoditized automaking.

          I understand that you don’t want one. Great. I’m all for it. Buy what you want. Don’t buy an EV. But to say that they’re not happening is just silly in light of what the INDUSTRY has been already and actually doing.

        • kevin says:

          This is a succinct infographic on the key considerations that car buyers look for before they are willing to switch to EVs. I thought this is quite relevant here.

          Key factors in summary of the survey:
          1. (EV) Price
          2. Charge Time
          3. Range
          4. Charging infrastructure
          5. Vehicle Choice

          Really, in my personal view, range is acceptable and EV price is quite competitive when you consider the total cost of ownership, so the only thing stopping me from purchasing an EV now is really the charge-time & availability of charging infrastructure.

          I suspect once this charge-time is technically resolved (like maybe ~15mins full charge time), we will see the consumers shift in a big way.

      • Wes says:

        The tipping point for EVs is $100 per kilo watt hour. Right now it’s ranging from $150-$125 per KWH with Tesla at or below the $125 KWH mark.

  9. MonkeyBusiness says:

    Just got an email from an Uber recruiter. They are back hiring Software Engineers in the Bay Area, New York and other places.

    Crazy times indeed.

    Stock market will rocket up for sure.

    • Nik says:

      Before you go ‘Ape’ over that…I presume its for Uber and why not,its the only part of Uber that kinda makes Money…lolol aloha

      • MonkeyBusiness says:

        Not only that, they seem to be expecting that Prop 22 will pass.

        Or maybe they’ve factored that into their equation.

      • yossarian says:

        i actually commute by uber now because the subway in new york has become too dangerous at night. the drivers tell me that even with the uptick of people like me, business is off. airport runs were their bread and butter and that’s still dead.

  10. andy says:

    What everyone is overlooking is that these prices are in ‘new’ post-Covid dollars.

  11. noname says:

    Some months ago, didn’t you say prices were going to plummet big-time?

    I’ve seen nothing of the sort.

    Used vehicles are selling insanely quick here. And I’ve heard auto auction prices are very high for the stuff they’re peddling.

    At least you included the stat that prices are up 15% in your article a few days ago.

    • Wolf Richter says:


      “Some months ago, didn’t you say prices were going to plummet big-time?”

      What I said on May 24 was this: when the Hertz vehicles are heading to the auction after the bankruptcy issues about them were resolved by late July (which turned out to be about right), they would exercise “downward pressure” on wholesale prices (which they started doing in August).

      Nowhere did I say that wholesale prices would “plummet.” Sheesh! Here is the exact quote and link from the article in May:

      “When those vehicles are suddenly being run through the auctions starting in late July, they will put downward pressure on wholesale prices, further increasing the losses.”

      However, I didn’t expect prices to surge like this in May-July. That was a surprise.

      To your credit, you clearly didn’t read the article. Just the headline maybe. So you wouldn’t know the details of what I actually said.

  12. Rodney says:

    When people dont have the money, how are they going to buy an over priced car?
    Will we see car prices still rising… I dont think so, and who do they think is going to go along with having to buy an electric car and dump what the have… and just wait till those EV Batteries die, they say 10 years, yer right try that in a cold freezing country, and where does that waste go, not so ‘green’ after all.looks like the UN and Greta’s dictate we will back in the 1750’s, if thats the case no electricity, and so no DIGITAL money the banksters are pushing for to cover their massive fraudulent debts they wont get paid back for….

    • Wolf Richter says:

      Used EV prices are holding up pretty well on the wholesale market, it seems. Manheim started tracking them some time ago because I asked them to :-]

      • GotCollateral says:

        Wow wolf, that is pretty cool! What other data that they don’t track can you ask them too?

        • Wolf Richter says:

          EVs was the big one. So it wasn’t hard to get them to do it. It was more like, “Oh, why didn’t we think about this sooner?

          Once the data is a little more seasoned, I’ll post the chart.

          But if I come across something big enough, I’ll ask.

      • Happy1 says:

        I’d like to see this data when those cars are ten years old. An ICE car at that age is at the median age for a vehicle in the US, roughly. What do you do with a ten year old EV that needs a 20K battery replacement?

        • Wolf Richter says:


          Those batteries already don’t cost 20k anymore. Google it. Replacing a Tesla battery with a Tesla battery might cost between $3,000 and $7,000. There are cheaper aftermarket solutions. Those battery costs have come down and will continue to come down. 10 years from now it might not be much of an expense anymore, given that the electric motor of an EV lasts MULTIPLE times as long as an ICE power train. An electric motor with 500K miles is nearly as good as new.

        • yossarian says:

          as to the batteries, yes, they are cheaper now but some caveats:

          the third party batteries are “rebuilt.” which means they have only replaced the dead cells and the other cells have a limited life span.

          the next generation of tesla batteries are going to be sealed in epoxy and structural to the car. not clear, if they will be replaceable.

  13. John says:

    I visited the local Toyota Dealership and looked around at the used Corollas and the prices were crap. I told the salesman I would return and buy 2-3 for the current price of one Corolla in 6-12 when the super depression really kicks in. I don’t give a super crap what the Blue Book states. I’m the consumer and I decide the price I’ll pay or I’ll walk away. I’m in control.

  14. Brant Lee says:

    My girlfriend wants another car, so I’ve been checking the local dealers online on KBB. There’s sure no cars going for even near wholesale or trade-in at this time. I’m thinking Jan-March 2021 will be the best time to look if there is ever going to be a buyers market.
    On the other hand, I’m sure dealers are taking advantage of the situation offering slim on trade-ins. Craigslist is probably the best place to look with people trying to get a better price AND other people trying to unload an extra car.

  15. lenert says:

    Not much effect on headline CPI though?

    • lenert says:

      four tenths of a percentage point contribution? (change in index x share of gdp?)

    • Wolf Richter says:

      Used vehicles weigh 2.7% of the total CPI. About 1/3 of the index is housing.

      • R Hughes says:

        In previous article you show stats that at wholesale auctions number of vehicles going thru are about twice the quantity of sales at retail dealers. Unless I misunderstood could you explain why such a variance.

        • Wolf Richter says:

          R Hughes,

          I’m not exactly sure what you’re referencing here, but I think there might be some confusion. Total used vehicle sales, including retail and wholesale, were close to 40 million units per year before the Pandemic. This year they’re going to be down a lot from that.

          I’ve always wondered about the logic of adding up wholesale and retail sales on a national basis, but that’s what they do.

          But maybe you were referring to this: the total combined number of used retail and wholesale (near 40 million units a year before the pandemic) is over twice total NEW vehicle sales (ca. 17 million units a year before the pandemic).

          Used retail is about 21 million units normally. This will be lower in 2020. Total wholesales are somewhat lower than used retail – around 18 million or so normally.

          But wholesale is kind of a confusing number. A car can be wholesaled more than once before it finally is sold to a retail customer. Dealers sell a lot of trade-ins that never run through the wholesale channels. And they wholesale trade-ins to other dealers or at auctions because they don’t want to retail them. Many franchised dealers wholesale their old trade-ins (over 8 years or so) unless they’re in really good shape.

  16. KGC says:

    My feeling is that used cars are being bought by those who cannot get a new car loan, and since unemployment is up that’s a huge number of people who need a car and now have to settle for what they can pay cash for.

    • CRV says:

      Also i can imagine that a lot of leasers have handed in their cars and bought a used one.

    • NickL says:

      Even a used car now costs around $20,000 now. Most people don’t have an extra $1000, they sure are not going to have 50% cash to put down (or even $1,000 cash)
      And ‘settleing’ for what you can pay cash for is a very bad idea since any car repair can quicky hit the 4 figures

  17. MonkeyBusiness says:

    Uber hiring again. JP Morgan lowering reserves for losses. Amazon doing Prime Day.

    People have money.

    The economy is doing better than expected.

    • Biorganic says:

      Really? “Economy” is referencing the Fed/congressional intervention strategies that have kept millions of unemployed relatively well funded, in historical terms.

      If/when that stops, then is when we see how well the machine is running. As it stands now we are all just watching a magic show. Where will we all be when the smoke fades?

      • MonkeyBusiness says:

        But it will never stop. Who is going to stop it? What is going to stop it? The answer is no one.

        When the smoke fades, we’ll all be here spending using possibly a different kind of money. But the point is we’ll continue to spend.

        • Jon W says:

          It will stop with either a massive asset price crash and pseudo-depression like Japan, or inflation.

          But there is no way you can abuse the economy in the way the fed has and have it continue to churn out high quality goods and services and sustainable productivity gains. Most of our smartest are in finance or its derivatives (including Unicorn companies). Nobody is incentivised to do useful work anymore. You don’t need to be an economist to see that this doesn’t end well.

        • yossarian says:

          printing money doesn’t create wealth, it only redistributes wealth.

    • GotCollateral says:

      So well that the banks can leave the discount window, and frbny can sell all the UST and MBS back to the market…


    • Wolf Richter says:


      You need to read what Dimon said about WHY JP Morgan lowered loan loss reserves. After the markets heard Dimon explain it, shares dropped 1.6% today. It seems you’re the only who didn’t get the memo.

    • NickL says:

      Amazon doing prime day?? sure people are charging up thousands of dollars on 15% + APR credit cards — how is that indicative of a “great economy”?

  18. Bobber says:

    Why would used truck prices jump 26% this year?

    It must mean there was more demand than supply. Perhaps the bad economy caused people that would otherwise upgrade to a new truck to sit tight with their old one. This would reduce the used truck supply and drive up prices. The movement of the supply curve would also explain the slight drop in transactions.

    You could have the same dynamic taking place with used cars as well.

    The way I see it, not too many people would buy a new car when they no longer have to drive as much because of the pandemic. They’d keep their old one.

    • fizee says:

      Bobber I think you are on to something and it sounds like supply chain disruption. Look at international air travel – same thing – lots less planes up but seat prices increased.

  19. tommy runner says:

    three quarters of the nations dealers took btwn 7.6-11.9b ppp funds. maybe some baby sitters bought some cars.

  20. Martok says:

    Interesting article about the surge of demand for used vehicles, and I will add that people are leaving large cities because of COVID, and that’s why existing housing is being snapped up elsewhere.

    Also IMO – people will be working and living in these used vehicles to start a new way of life after all assistance’s have dried up, evicted out, and become gig workers, or drifters.

  21. Michael Engel says:

    1) Brand new F150 and Ram ticket price are $5K – $10K higher today than 3 years ago. It pays to keep the old, spend on maintenance than buy new ones, pay higher sale tax and insurance. For many blue collar small contractors brand new trucks are are expensive cost center for the small size of their business, when the competition is growing, Fico is falling and they sweat on call for the banks and the insurance co.
    2) Car dealer played a shell game with the looters and the rioters. To protect their capital they split inventory, hid it in other parking lots, for safe keeping. Running their business with small samples in each category, replenishing with what they got, ordering less to survive.
    3) That might explain the falling wholesale prices.

    • Harrold says:

      Are you kidding? Car dealers probably contemplated hiring their own protesters to torch their cars for the insurance money.

  22. Martha Careful says:

    General background of the economy from FRED — note gas prices related to GDP and of course the insanity of ovrervalued stocks, zero interest rates and volatility all crashing into one extreme period of pandemic stress

  23. Jdog says:

    The hurricanes are always good for the used car market. There was extensive flooding in the gulf, and a lot of cars got flooded and were totaled by insurance.

  24. Marc D. says:

    I think what happened was, since they stopped making new cars in the spring for a few months, there was a lack of supply of new cars in the summer period, so that caused the prices of used cars to go up during that time. But now that factories are making new cars again, and more used supply is coming on from the rental companies, used car prices should start dropping again.

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