Have you ever watched the news channel to check the weather? Meteorologists study recent weather patterns and use forecasting tools to predict the weather for the week. Auto auction dealers are the same way when it comes to predicting how auto auctions will perform.
Over the past 15 years, Big Valley Auto Auction has been through numerous ups and downs in the auto auction market. We're going to use our past experiences to give you tips on what to expect for auto auctions in the year 2024.
In this article, you’re going to learn what factors will affect the auto auction industry for the upcoming year and provide you with the information needed to prepare for attending auto auctions in 2024.
What Should I Expect From Auto Auctions in 2024?
While the future is uncertain, there are 4 factors that have been proven to shape the direction of auto auctions:
Dealership Strategies
In previous years, the automotive market started off strong. Dealers were quick to buy vehicles and stock up their lots for the year. However, recent years have seen the market kick off to a slower start. This outcome is a product of auto auctions regaining momentum after a slow end to the year before, along with the effects of the holiday season.
Rather than immediately rushing in to stock up on inventory, dealers have become more deliberate in their purchasing, choosing to wait before adding inventory to their lot. However, this cautious approach pays off in the long run. As the tax season gets closer, the market slowly gains traction and sees a gradual increase, steadily building towards a strong spring season. (April-May)
This strategy of waiting longer can cause you to pay more. As demand increases, so do the prices. If you can afford to buy early, it might be something you should consider.
Tax Season
One crucial turning point in the automotive market's early-year performance is the anticipation of the tax season. The tax season brings in consumers with refund checks, providing them with the financial means to purchase vehicles. Dealers recognize this opportunity, and this is when they strategically make their moves to stock their lots. By the time spring arrives, the automotive market is typically in full swing, and dealers are ready to meet the demand of buyers.
Location
The investment value of vehicles can vary significantly based on your specific location and the preferences of the local market. For example, in South Texas, 4x4 and lifted trucks are popular. Similarly, in the Rio Grande Valley area of Texas, both large and small SUVs tend to be solid choices. In contrast, in bigger Texas cities like Dallas and Houston, Sedans often rank above other models.
However, a shared factor between these areas is the preference for vehicles with low mileage, falling within the price range of $8,000 to $15,000. These automobiles are consistently in high demand among auto auction attendees, as they fall into a sweet spot in terms of affordability and long-term reliability, making them solid investments in a wide range of locations across Texas.
This regional variation in vehicle preferences highlights the importance of market research and understanding local customer needs. Dealers need to adapt their inventory to cater to the specific demands of their target demographic. Auto auctions also need to adapt to cater to their online buyers.
Online Engagement
One of the notable trends in the automotive market is the increasing prominence of online engagement in auto auctions. While traditional, in-person auctions continue to have their place, online participation is expanding rapidly and is expected to continue growing.
While we can’t speak for other auto auctions, Big Valley Auto Auction has 80-120 online buyers every sale day. As new technological advancements arise, online buys will continue to increase. Many dealers are too busy to leave their offices regularly, which can lead to missing out on attending auctions in person. However, with the option to buy online, dealers can more easily take advantage of this opportunity, allowing them to purchase vehicles directly from their desks.
Am I Prepared to Sell at an Auto Auction in 2024?
As mentioned before, the future is uncertain. While past trends have become yearly occurrences, there is always the possibility of things changing. However, factors such as dealership strategies, tax season, location, and online engagement have proven to affect the auto auction industry every year.
If you're an inexperienced dealer getting ready for your first sale or an experienced one preparing for another year of sales, you can use this article as a resource to help you approach auto auctions in 2024 with confidence.
Now that you know what to expect when selling this coming year, here are 4 tips that can help you increase your vehicle’s chance of selling.
