Auction Supply Up; End to Used Supply Crunch?

IRVINE, Calif.  - 

Perhaps this whole used-car scarcity situation is on its way out.
Or at least improving significantly.

Kelley Blue Book said in a recent report that auction volume climbed nearly 1 percent year-over-year last quarter and should remain ahead of 2012 levels. What’s more, off-lease supply moving into the auctions should increase dramatically over the next two years, KBB said.

The 0.8-percent increase in auction volume in Q4 compared favorably to prior quarters, according to the company’s data. Auction volume was down 1.9 percent in the third quarter of 2012, it fell 2.4 percent in the second quarter and was off 3.2 percent in the opening quarter of last year.

Here’s a caveat though: Despite the near 1-percent auction volume hike last quarter, it was still 26 percent softer than the same period of 2007, before the recession hit.

“While analysts don’t expect auction volume to return to levels seen in 2007 and prior anytime in the near future, moving forward they do expect auction volume to remain above levels seen last year,” KBB’s Alec Gutierrez said in the latest Blue Book Market Report.

“In fact, Kelley Blue Book believes wholesale auctions likely will see an increase of at least 200,000 off-lease units in 2013, and even more in 2014. With that in mind, auction values likely will continue to decline from current levels,” added Gutierrez, who is KBB’s senior market analyst of automotive insights.

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