Rising used-vehicle supply will probably push prices down in 2017

Used-vehicle sales are set to rise again in 2017 after jumping 4 percent last year, the fastest pace since the Great Recession. Despite the projected sales increase, demand is unlikely to keep up with rising wholesale vehicle supplies as more off-lease vehicles return to the market. The growth is going to occur, but it is not going to occur as fast as the increase in wholesale supply. As a result, there will be downward pressure on used-vehicle prices.

Despite a glut of off-lease vehicles beginning to enter the used market over the past year, pricing has remained relatively stable since values spiked during the recession. It’s clear that the stability has been the most notable aspect of wholesale pricing in recent years. After a sharp rise in wholesale pricing in 2009 and 2010 coming out of the recession, the absolute year-over-year change in pricing was less than 2 percentage points in each of the last six years. Read more

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