Skip to main content

Top Trends for Auction Buying in 2019

I recently tuned in to our Cox Automotive industry experts before the holidays. I saw no surprises from the last several months’ demand for new, used or specific vehicle segments. My takeaway is that perhaps we can now forecast some potential opportunities from these trends that stayed consistent in the second half of 2018.

The trends:

  • New vehicle sales now are represented by 49% SUVs and 30% cars
  • Used vehicle sales are represented by 50% cars and 33% SUVs
  • Incentive spending on new vehicles was down 4% in December versus last December
  • Wholesale prices at auction continue to fade from a record high. Prices in December decreased 1.03% from November.
  • Interest rates are rising! They’re now 2.4% higher than the lowest point of this bullish auto market.

So, what can we read into these numbers? Is there something here that allows us to speculate on opportunities for 2019? As they say in football, let’s break it down. New vehicle sales tell us everyone wants an SUV. But, with the average used car price exceeding $20,000 and interest rates up (causing noticeably higher vehicle payments), we can’t ignore that cars still represent 50% of used vehicle sales. Digging deeper into prices at auction, I found wholesale prices of 4-year-old compact cars down slightly at auction and 4-year-old compact SUV wholesale prices up 12%. Wow!

If I wanted to find some affordable-payment cars at auction, I’d probably need under-$10K-retail stuff, right? Actually, 50% of the compact cars listed on the internet that sold in November and December were between $12K and $16K. Wholesale prices of 3-year-old, slightly larger intermediate cars were up just 3% at auction, again much less than the SUV increase. And at retail, 53% of the intermediate cars listed on the internet that sold in November and December were between $12K and $20K.

In summary, it takes 3–4 years for significant new vehicle shifts, like the demand for SUVs versus cars, to impact used car sales trends. Add in higher payments caused by higher interest rates, and the lack of affordability has a real negative impact on that burning desire for an SUV. There are a lot of numbers in this article, but technology can make finding cars easy.

Let technology allow you to find the right cars in a fraction of the time so you can take advantage of emerging market opportunities in early 2019. Happy New Year, happy buying and good selling!

About the Author

Patrick Janes brings more than 30 years of automotive industry knowledge to team vAuto. As the senior business development director for Stockwave, vAuto’s wholesale sourcing solution, Patrick knows firsthand the biggest risk to ROI is buying inventory at auction, having previously managed day-to-day operations for nine years as a dealership general manager. Before his dealership experience, he spent the first half of his career working with dealers across the country in several field offices for an OEM. For three years, Patrick served as a vAuto performance manager, building a solid understanding of customer needs and expectations. He has seen firsthand an exciting new generation of technologically savvy used car managers and owners that find Stockwave saves time and enables a more strategic approach to the acquisition process. Patrick received his bachelor’s degree in industrial engineering from Bradley University. Patrick has served as a lecturer for Northwood University since September 2018. He teaches vAuto Velocity Principles to students enrolled in Automotive Marketing & Management major: Role & Function of the Auto Dealership and Dealership Variable Operations.

Profile Photo of Patrick Janes