Tax refunds are finally coming, ushering in the traditional spring rebound in used-vehicle sales, according to Cox Automotive’s analysis of vAuto’s available inventory data released March 17. Used vehicle sales, although still expensive, began to heat up in the last week of February, drawing on supply.
Used vehicle inventory began to build to more normal levels in late January ahead of the spring sales season. On March 1, the total supply of unsold used vehicles on dealer lots across the United States stood at 2.62 million units. That compares to Cox Automotive’s revised number of 2.55 million at the end of January. Supply entering March was almost 5% higher than a year ago.
However, sales warmed up at the end of the month and closed with a 51-day supply, down from the revised number of 55 at the end of January. Day supply at the end of February was up 11% year-on-year.
Cox Automotive’s day supply is based on the daily sale rate for the most recent 30-day period, which in this case ended March 1. Cox Automotive estimated retail sales of used vehicles rose 3% in February from January, but failed to show the typical seasonal increase driven by tax refund season until to the last week of the month.
“We are finally starting to see the big spring rebound in our used vehicle data,” Cox Automotive senior economist Charlie Chesbrough said in a press release. He noted that in the last week of February, used vehicle sales were up 104,000 units from the previous week, marking the best week for used vehicle sales since late November.
“High prices don’t seem to be hampering sales,” Chesbrough said. “But the sales caused a sharp drop in the day’s supply.”
In late February, the average listing price fell again to $27,608, about the same as a month earlier but below December’s peak when it topped $28,000, according to data from Cox Automotive. Yet the average listing price was 28% higher at the end of February 2021. On the wholesale side, the value of used vehicles, according to the Manheim Used Vehicle Value Index, fell by 2.1% in February on a seasonally adjusted basis and decreased by 3.8%. in the first 15 days of March compared to the full month of February.
The lowest price segments had the lowest inventory and the lowest days of supply, according to Cox Automotive’s analysis of vAuto’s available inventory data. Vehicles under $10,000 only had a 32-day supply. Those priced between $10,000 and $15,000 had a 37-day supply. The $15,000 to $35,000 price segments, which represent the largest supply volume, had days supply ranging from 43 to 59 – the higher the price segment, the higher the day supply .
Originally posted on Remarketing of vehicles