I have lived the wholesale auto auction business ever since 1999.
In that time I have been an auto auctioneer, a remarketing manager, a part owner of an auto auction, and a dealer here in metro-Atlanta for the last 18 years.
Here's the reality. First off, car prices will never be as cheap as they recently were back in 2019 because cheap new cars are getting systematically eliminated by those who can't sell them profitably. The price of the average new vehicle has gone up to well over $38,000 which means that there will be far fewer bargain basement offerings in the used car market going forward. This inflation was happening well before the chip shortage took place.
Second, the auctions have been able to successfully sell virtual sales as the new normal for dealers and rental car companies. The good news is that as a dealer, I can now visit well over a dozen auctions on a single day. The bad news? So can everybody else, and the tools we all use to figure out what to buy is becoming increasingly identical.
This is the main reason why a 2014 Corolla with 60,000 miles now cost as much as a 2017 Corolla with 40,000 miles did back in February. When your tools are giving you constant buy signals based on your ability to supposedly get more money for the car, prices skyrocket. You now have Carvana, Carmax and Drivetime pricing in a certain statistical portion of seven year loans to subprime customers (a.k.a. the industry sweet spot), going up against the Hertz, Avis, and other major rental car companies. In between all that you have franchise dealers who are sucking up every potential lease deal before it ever even ends up at an open wholesale auction.
I can tell you that there have been days where Toyota Financial Services had absolutely nothing to offer at the wholesale auctions other than a few random pieces of junk. Ford usually has around 1,000 vehicles a week at their open sale here in Atlanta. Last week it was fewer than 150 and all of those were either junk or unpopular base models.
There are other issues at play but for now those are the major forces. By the way, if you're wondering who I am... I created
this study on the long-term reliability of used cars which now has over three million vehicles in its database. If any of you know a web designer who appreciates minimalist graphics and quick downloads feel free to PM me.
All the best!