Trying to sell vehicles at an auto auction when the market is low is like trying to sell a heater during the summer. There might be some people who will buy one because they want to be prepared for the coming season, but most people will just wait until fall and winter.
Big Valley Auto Auction has been around since 2008 and we’ve interacted with automotive dealers who had that same mindset. They try to sell during the summer, when demand is often low, but most buyers will wait until fall to restock their inventory. However, this doesn’t mean you shouldn’t sell when business is slow.
In this article, you’ll learn what time of year the auto auction market is down, some strategies to help you take advantage of a down market, and how it impacts vehicle availability.
After reading this article, you’ll have the information needed to help you sell vehicles and keep some money flowing when the market is down.
When is the Auto Auction Market at its Lowest?
Past trends have shown that summer months, such as May through August, tend to be a low point in terms of inventory for auto auctions. For example, Big Valley Auto Auction normally runs about 500+ vehicles a week during the month of May. However, the month of June drops to around 400 vehicles, which is a 20% decrease in inventory.
As a result, sellers in the auto auction industry need to be aware of these seasonal fluctuations to make informed decisions and maximize their opportunities in the market.
How Can Auto Auction Dealers Capitalize on a Down Market?
While there’s no guaranteed money making strategy, there are 3 options dealers can use to help capitalize on a slow period in the auto auction industry.
Strategy 1: Team Up with Auto Auctions
One strategy dealers can use is to join forces with a local auto auction for assistance with exposure. We can’t speak for other auto auctions, but Big Valley Auto Auction offers collaboration opportunities with other dealerships. Through these partnerships, we help dealers optimize their sales potential by going to their lot and doing condition reports while their vehicles remain in the lot.
We’ll also post photos of your vehicles on different online platforms, such as OVE, SmartAuction, and Auction Edge. This benefits your dealership as it will bring in more views from people browsing the Big Valley Auto Auction website without you having to take your vehicle out of your lot.
Strategy 2: Adapt Your Pricing
Although auto auctions offer their services to their dealers, not all dealers are willing to bring in their inventory when the market is down. The reason for this is that dealers do not want to sell their vehicles for less than what they paid.
However, if your primary goal is to make space for new inventory, adjusting your prices to current market value may help in selling. The price set depends on how much a seller is willing to potentially lose. Asking too much for a vehicle during a down period may push buyers away. You’ll need to adapt certain factors to the state of the market in order to increase your chance of selling when the market is down.
Strategy 3: Utilize Social Media
A cost efficient way dealers can promote their business and inventory during a slow time is to take advantage of social media platforms. Having employees or dealers post videos or photos to promote their own vehicles, or just maintaining a social media presence, is an inexpensive way to help bring attention to your business.
This strategy also allows dealers and their employees to have fun with these social media posts, which will resonate with the audience and catch their attention. Unsure what to post about as a dealer? Visit Big Valley's LinkedIn page for a few examples.
How Does a Down Market Impact Vehicle Availability?
Just like during a normal market, auto auctions in a down market will still have different types of vehicles available. However, the amount of vehicles may be lower due to fewer dealers willing to sell their inventory for a potentially lower price.
High end vehicles, like a Maserati, are typically found at retail lots rather than wholesale, to avoid taking a loss. If the retail price is $13,000 and the wholesale price is $10,000, the seller will just wait to get the $13,000. Commercial vehicles, like a Chevy Cruze, may still be available through wholesale lots, local auctions, or online platforms.
Should I Sell My Vehicles When the Auto Auction Market is Down?
If you’re someone who likes to take advantage of down times, selling your inventory when the auto auction market is down would be something to consider. It gives you the opportunity to team up with auto auctions and reach the buyers who are preparing to stock up their lot before the market picks back up.
Whether you’re unsure about selling your inventory when the auto auction market is down or you’re weighing the risks and rewards, you can use this article as a guide to help you sell during a slow period.
Now that you know more about selling vehicles when the auto auction market is down, learn the 4 things you can do to increase your vehicle’s chance of selling at your next auction day.
