It all has experts and observers expecting a strong spring.
"The consensus that we hold, without any exceptions, is that the second half of this first quarter, and at least the second quarter of this year, are going to be extraordinarily strong for used-vehicle sales," said Dale Pollak, Cox Automotive executive vice president and founder of vAuto, the inventory software company.
Not only do the economics look good, but heading into this spring, there appears to be more comfort with how the market is functioning. "I don't think it's going to be as disruptive, positive or negative, as it was last year," Pollak said.
Last year was "frickin' nuts," he said. Ahead of the spring selling season, in February 2020, analysts and dealers were prepared for a potentially record year for used-vehicle sales: All the signs were pointing in that direction. A month later, as the coronavirus pandemic began spreading and shuttering parts of the economy, it brought the used-vehicle market to a near halt.
But by May, as many restrictions eased, used-vehicle sales came roaring back. "And perhaps for a good six months thereafter, frickin' cars appreciated," Pollak said. "And cars are not appreciating assets."
Used-vehicle sales remained strong through the summer, and only cooled off later in the year, in line with seasonal patterns.
As the used-vehicle market rapidly recovered, a new challenge appeared: tight inventory.
"I didn't sleep when we were shut down in Michigan and I had $40 million in used-car inventory," Dave Katarski, COO of Feldman Automotive Group, said of the situation last spring.
"And of course, I came out of it, and in hindsight, I wish I would have had $80 million" in inventory.
Pollak said that Cox Automotive's Manheim auctions have about half of the vehicles they had last year at this time. Another sales surge this spring, which is likely, will lead to higher prices, and "we're already starting to see it," he said.
