All Signs Point To Good Auction Times
With extreme weather events, off-lease volume fluctuation and seemingly countless other influences over the wholesale and retail markets, it’s been difficult to predict what could happen next. However, several indicators show a stabilizing market ripe for big scores at the auction lanes and on your retail lot.
Wholesale used prices are the lowest in six months. With January’s 0.74% dip in wholesale prices, the Manheim index sits at its lowest level since July 2017. While this is still a nearly 5% increase year over year, it signifies a market returning back to normal levels that will play right into the hands of eager auction buyers.
Large numbers of late-model vehicles were sold at auction. In 2017 2.8 million late-model vehicles were scooped up at auction, much of which was made up by the 3.59 million off-lease units that came back into the market. With that number expected to rise to 3.89 million units in 2018, even more late-model vehicles could be available at auction this year.
2015 and 2016 were big years for leasing. And two to three years after high lease numbers means high auction volume for dealers looking to score a great car at a great price. In 2015, a 12% hike in leasing set a then-record at 4 million lease originations. The market hit a new peak at 4.5 million in 2016. All this means that 24 and 36-month leases coming into the market this year are promising for used car dealers.
A growing economy with room for more. Consumer confidence is at its second-highest rating in 17 years and unemployment remained at a 17-year low. Meanwhile, underemployment went up to 8.2% which shows that there’s still room for more consumers to ride the good economic waves into income levels that will have them in the market for a quality used vehicle.