Just like every industry, used car auctions have trends that change over time due to different factors.
For instance – the lockdown and semiconductor chip shortage affected the entire auto industry and two years down the line the ripple effects can still be felt. Currently, increased gas prices, inflation, and other global economic activities have an effect on the used car market.
Increased demand and limited supply of vehicles have affected used car inventories as many sellers are holding on to their vehicles more. This is thanks to the limited supply of vehicles in the market because the world hasn’t recovered from the chip shortage.
Also, we see a shift from gas-consuming engines to more fuel-efficient vehicles, hybrids, and EVs due to the rising gas prices.
Let’s delve more into these trends…
Used Car Auctions Recent Trends
1. Availability of Vehicles
Since after the lockdown, vehicle inventory began to shrink as the supply of vehicles became limited. This was due to the semiconductor chip shortage that happened due to the lockdown in 2020.
The used car market saw a reduced supply of vehicles because sellers were holding on to their vehicles. This has led to higher demand but a limited supply of vehicles at the auctions. More people are bidding on the limited available cars, increasing the competition for vehicles.
2. Increased Rates and Prices
Many countries around the world are currently facing inflation due to global trends and economic downtrends. This has led to increased prices and rates of exchange currencies. Prices of commodities have increased in prices and buyers are beginning to prioritize.
Many car buyers are being cautious with their buying as this has also skyrocketed the prices of cars. The used car market has seen an increase in the last year as many people cannot afford brand new vehicles. They have turned to a cheaper alternative – which is not as cheap due to increasing demand.
Countries like Nigeria have been hit hard by the increase in exchange rates and customs duty prices. Nigeria is one of the major buyers of US car auctions, and the increase in prices has caused a decline in their buying power.
3. Demand for More Fuel Efficient Cars
According to AAA, regular gas dropped to $3.99 for the first time since March, but this still isn’t enough to get drivers back to the pump. Many drivers are searching for other alternatives to gas-powered engines.
The demand for hybrids and EVs went up by 32% and 69% as cited by AVC.
While some drivers are switching to hybrids and EVs, many other drivers are in the market for fuel-efficient cars. They are doing whatever they can to save on gas – thereby spending less.
4. Increased Competition for Auction Cars
Car auctions have been where many used car dealers source their major inventories. In recent years we’ve seen more public and individual buying from many auction platforms. With the increasing cost of cars from dealerships, you can’t blame anyone seeking out cheaper buying options. Buying from a used car auction allows the buyer to save on the dealer’s profit margin.
Also, car auctions allow buyers to have access to a large inventory of cars. They have the opportunity to choose exactly what they want. Online auctions allow buyers to filter the car based on year, make, model, and even title or damage. This feature is awesome for buyers who have specifics in their minds.
Getting Started With Car Auctions
There you have it – some of the recent trends in the car auction industry. We will continue to give you updates on what to expect while buying from car auctions.
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