Over the past year there has been a noticeable trend throughout the auto auction community. The value and availability of late-model cars has significantly increased. At the same time, the demand for older cars has diminished. This creates the perfect opportunity for savvy auto auction goers to land a reliable vehicle at well below market rates. It is important to keep in mind that even though the values of late-model cars on the secondary market have increased, auto auctions are still significantly less expensive than purchasing a used car from a dealership.
Auto Auction Companies Reported Nearly a 10% Rise in the Volume of Late Model Cars
A recent report notes that auto auction companies have seen a rise of nearly 10 percent in the volume of late-model cars in their recent listings. In this report late-model cars were defined as anything four years old or newer. In total, the number of vehicles 1 to 2 years old climbed by five percent. The amount of vehicles 3 to 4 years old climbed by 13 percent.
Low Rate of Depreciation and Price Strength Key Factors
There are two driving factors behind the rise in the demand for late-model cars. The first is the low rate of depreciation. The average car sees a majority of its depreciation within the first 12 to 24 months of its lifespan. By purchasing a car one or two years old at an auto auction, car buyers can avoid a majority of the initial depreciation without sacrificing value or reliability. Additionally, the current price strength of late-model vehicles makes them a solid investment. Cars are built to last much longer than they used to. As a result, their long-term depreciation rate is significantly slower than it was a decade ago. This price strength is a driving force behind the desirability of late-model vehicles.
Auto Auction Companies Reported a Significant Decrease in Demand for Older Cars
