While the official figures haven’t dropped, just about every outlet tracking new vehicle sales is projecting a significant decline in volume for December 2021. Showrooms have been trending toward the minimalist aesthetic since 2019 with the pandemic kicking things into overdrive as supply bottlenecks nullified practically every manufacturer’s ability to produce anywhere near its normal pace.
Last December was bleak, with sales falling by around 5 percent for the month as the typical transaction price for automobiles set new records. The U.S. market only saw 1.54 million sales, the lowest volume witnessed since December of 2014. But 2021 volumes are shaping up to be decidedly worse. This month is on track to fall by anywhere from 23 to 30 percent with retail sales barely cresting 1 million units as transaction prices for both new and used vehicles surpass all previous metrics.
If you’re in the market for a new vehicle, you’ve likely noticed that some of the models you were interested in aren’t available in your preferred format and happen to be accompanied by sizable dealer markups. Well the used market, formerly a refuge for those seeking a bargain and a shrewd way of dodging the steepest period of deprecation, isn’t doing much better.
According to Black Book, the typical transaction price for used vehicles has gone up by over $500 in less than a month. Pegged at $27,000 in November, the average secondhand car now trades for over $27,500. As we’ve recently covered just how wild secondhand vehicle prices have become in 2021, we’ll keep this one relatively brief. But it must be said that automotive values are starting to seem totally disconnected from anything that could be considered rational as cars now have MSRPs a third higher than they were at the start of 2021.
Used-vehicle prices set another record last month thanks to elevated demand and suppressed production of new cars. Depending on who you ask, the typical transaction fee for a secondhand automobile rose nearly 50 percent in November vs the same period in 2020. While the pandemic had meaningfully suppressed demand during that time, that’s still a staggering increase over any 12-month period.
Sharing Cox Automotive’s Manheim Used Vehicle Value Index, Automotive News nailed down the annual difference to a 44-percent increase. This also represents the November pricing index swelling by 3.9 percent against October, which is noteworthy in itself. But what does that look like in dollars?
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