The used car market share in the US has increased dramatically in the past couple of years. In 2017, approximately 40 million used cars were sold in the US. During the same period, 17.2 million new vehicles were sold. The high demand for used cars has driven the sales in auctions up, as many dealers are looking to gain from the incredible demand for used cars in the US. The situation has become even better for dealers and auto auctions since the Trump government announced an increase in tariffs for car imports.
The auto market is mostly driven by the tax refund season. This means that used car sales are usually highest in March and April. July is generally a slow month in the car sales industry, but things have been different in 2018. There has been an influx in used car sales because many buyers probably want to make their purchases before the announced tariffs start.
Why Auctions are Becoming Popular in the Used Car Market
Many Cars under One Roof
Auctions have a large collection of used vehicles ranging from vintage to more modern cars. Dealers can get a large variety of cars at an auction. Auction organizers receive cars from individuals, corporations, and insurance companies. This increases the chance of dealers getting the type of cars they need, especially those who are very specific on the type of cars they sell. The possibility of finding rare cars is also higher in auctions. If what you seek is a unique car, the best place to find one is at an auction.
Used Car Auctions are Convenient
If dealers were to look for used cars for sale, they would have to go to different places. Unfortunately, there is usually no guarantee that they would find the type of cars they want. Auctions increase the possibility of them getting the cars they need, without going to different locations. Additionally, dealers can participate in the auctions online. You can place bids at any time of day or night. The 24-hour feature has encouraged more people to trade using auction sites. This has prompted more dealers to register with auction sites and place their bids.
Increased Chances of Getting a Car at a Grand Bargain
Although all the cars at auction have a reserve price, bids do not always go beyond that price. Sometimes, the highest bidder is picked even if the price is much lower than the reserve price. This is one of the reasons dealers prefer to use auctions. If they buy a used car at a bargain price, this increases their profit margins.
Increased Consumer Demand for Used Cars Less Than Three Years Old
Many consumers, especially those who cannot afford new cars, choose to buy modern used cars, usually cars less than three years old. Dealers are always looking for newer models of cars, especially if their clientele falls under this category. The best place for dealers to get an extensive collection of these cars is an auction. These vehicles usually come in mint condition, which means dealers can sell them fast.
Wholesale Deals and Auction Sites
One of the main reasons dealers choose to use auctions is the great bargains they get when they purchase used cars in bulk. The wholesale prices have attracted many dealers across the US to the used car auction sites. The attractive prices are an excellent bargain for the dealers, and the convenience of online auction sites also allows for a wider range of options. Auctions sites utilize this resource to encourage more dealers to invest in the used cars sold in the auction sites.
One of the challenges used car dealers face is the lack of information on the cars they choose to buy. It takes much effort to finally get details such as the car’s history when not dealing with a used car auction. By the time a vehicle is auctioned, all the information is usually available for the buyers. The dealers also determine whether the cars are worth bidding for or not. They do this by scrutinizing all the available information on the vehicles. This makes it easier for the dealers to make decisions on how much to bid for the used cars, or whether the cars are worth bidding for or not. The dealers also get to scrutinize all the available information on the cars. Having all the vehicle details usually helps dealers to make a sale faster.
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Flexible Terms for Dealers
The demand for used cars is largely responsible for the increase in market share by auctions. As more people continue showing interest in used cars, the number of auctions selling used cars only stands to increase. Auction sites have continued to improve their terms of service to encourage more people to buy cars through auction sites.
Some of the features availed to dealers is the possibility of buying and selling cars without driving them out of the lot. This feature has been a great asset since dealers who do not have enough space to keep the cars they have bought can utilize the lots of auction companies. Those who cannot attend auctions physically have the option of placing their bids online. This offers excellent opportunities for dealers from different states in the US to take part in an auction that is held in distant states.
Commissions are also charged per trade by the auction sites. This way dealers do not lose any money if they do not place the highest bid. This has encouraged many people to participate in auctions because they understand the risks they will be taking will not affect their business adversely. This also promotes healthy competition, especially for cars that are in demand.
The auction market share in the used car industry is bound to grow bigger. People are always looking to upgrade the cars they own. There are also individual car sellers who are not in a position to seek buyers for their vehicles. Auctions have come in handy for both sellers and buyers. As long as the terms of trade continue being favorable, used car sale business can only get better. This trend will result in an efficient and productive used car industry.