The major car auctions in the UK are growing their business rapidly with more dealers committing their unwanted trade-ins to auction than ever before. In days gone by dealers would move most of their trade-ins on themselves mainly to local traders and other garages that may specialise in retailing older examples that the dealer themself would not normally entertain.
A few years ago car auctions really began to get their act together, both in demonstrating how slick their re-marketing campaigns could be but in part also by making the process of buying through auction so much easier and more transparent for trade buyers. Crucially they also instilled confidence in private buyers that this was a safe way of buying a car which, although may not have the frills of buying from a dealer, certainly from a price point offered a definite choice.
Ironically dealers entering cars for sale at auction have to be very transparent around the descriptions and if it later transpires that there was a fault with a car that wasn’t disclosed at the time of sale, it can often mean the dealer buying the car back and incurring a loss if bought by another trade buyer.
All this means that private buyers can have the confidence that what they are bidding on is what they are buying as the descriptions are accurate. As a result there are more people bidding on cars which in turn hikes up the price which is a bonus for the vendors and great news for the auction in increased fees.
However having spoken with many traditional trade buyers who may have bought most of their retail stock through this channel, because any decent cars tend to make top dollar they are deserting the auctions and looking elsewhere to acquire stock at more reasonable prices. Indeed one auction veteran we ran into said I can stand here all day and maybe buy 1 car which is all the money or go online to other re-marketing sources and buy 4 or 5 cars from the comfort of my office at home.
The internet and particularly online selling at auction is growing at a rapid rate, and as the auctions produce more accurate descriptions it is certain that many trade buyers will buy cars in this way rather than physically attending especially if the auction is a long way to travel. This will mean that physical trade buyers, private buyers and online buyers will all be competing for the same cars which will inevitably push prices up and again can only be good for the profitability of the auctions and encourage more dealer groups to re-market their cars through auction houses.
It can really only be a matter of time before the online buying facility is opened to the private buyer in the same way. Then we will have genuine competition for cars and increased pressure on car dealers to present a viable alternative to customers in the way of better facilities and increased customer care in order to continue selling cars profitably