Auction data reflects a brief pandemic-induced fall, then a sharp increase in prices this summer and autumn.
Cars are supposed to depreciate over time, this pandemic has made an exception to this rule.
Supply / Demand Imbalance
Weak Supply and Shortages
- Factories shut down 6 to 8 weeks, no new cars being made
- No Repos, state moratoriums reduced supply
- Weak rental market, less vehicle churn, less inventory at auctions
- Lease Extensions for vehicle leases expiring during the pandemic
Strong Demand
- Stimulus checks gave liquidity to low wage shoppers similar to the tax refund
- Less carpooling due to social distancing forced people who didn’t have cars prior to buy a car
- Low interest rates
- Less reliable and older cars being phased out by shoppers not looking to repair
October 2019 vs. October 2020 Price Fluctuation Per Segment
| Segment | Price Change 2019 to 2020 |
| Compact Cars | +5.5% |
| Midsize Cars | +5.7% |
| Luxury Cars | +18.6% |
| Pickup Trucks | +28.2% |
| Sport Utility Vehicles | +12.9% |
| Minivan | +5.4% |
| Volume adjusted total | +15.4% |
Book Value Comparison
Vehicle #1:
2018 Honda Accord LX 4D Sedan 1.5L at
04/01/2020 Average Trade-In = $16,920
10/30/2020 Average Trade-In = $16,865
Depreciation = $55 or 0.32%
04/01/2019 Average Trade-In = $17,645
10/30/2020 Average Trade-In = $17,220
Depreciation = $425 or 2.4%
Vehicle #2:
04/01/2020 Average Trade-In = $24,600
10/30/2020 Average Trade-In =$25,425
Depreciation = <$825> or <3.35%> – Car went UP in price
04/01/2019 Average Trade-In = $28,800
10/30/2020 Average Trade-In = $27,500
Depreciation = $1,300 or 4.5%
Vehicle #3:
04/01/2020 Average Trade-In = $40,050
10/30/2020 Average Trade-In =$42,400
Depreciation = <$2,350> or <5.86%> – Car went UP in price
04/01/2019 Average Trade-In = $44,060
10/30/2020 Average Trade-In = $42,900
Depreciation = $1,160 or 2.63%
