Even as their pace of growth slowed in the final weeks of 2021, wholesale used-vehicle prices again increased in December, hitting new record highs, and analysts expect prices to rise more in the spring.
Cox Automotive said Friday that its Manheim Used Vehicle Value Index, which tracks vehicles sold at Manheim's U.S. auctions, rose 1.6 percent in December compared with November. The index soared for all of 2021, with its December number 47 percent higher than the same month in 2020. Those numbers were adjusted for mix, mileage and seasonality.
Manheim said the December number slipped 1.1 percent compared with November on a nonadjusted basis. The index rose 43 percent on a nonadjusted basis for all of 2021.
Average 2018 model year wholesale prices softened in the last five to six weeks of 2021, while retail prices increased, Cox Automotive Chief Economist Jonathan Smoke said during a Friday call.
Cox Automotive predicted last month that prices would fluctuate in a minor way through the end of 2021.
Company analysts said 2021 was marked by two long cycles of appreciation in used-vehicle values — one from February to May and another from September to November, periods in which the Manheim index set record after record.
Spring price growth was fueled by "frenzied" demand, itself spurred by economic recovery, tax refunds and government stimulus payments, said Kayla Reynolds, economic and industry insights manager at Cox Automotive.
And tight supply coupled with extreme demand in the wholesale market — including demand from rental companies — drove those record-setting used-vehicle prices through the fall.