The supply chain straighjacket, microchip shortage and diminishing Delta variant all combined to define the used vehicle auction market during the third quarter, according to an AutoIMS quarterly report released Oct. 26.
The universal chip shortage and other emerging supply chain issues continue to create challenges that depress volumes in most commercial seller segments, the report concludes. Overall, vehicles are still bringing the money, and average days to sell is edging down.
The latest industry metrics were compiled from the aggregate data of about 750 auctions that are clients of AutoIMS. Here are key standouts:
- The conversion rate — percent of vehicles sold on a day in which they were offered — fell to 67% in 3Q 2021 from 72% in the same quarter last year.
- Vehicle sales volume dipped by about 25% in September compared to September 2020, and was also down year-to-date, year-over-year.
- Average sale price was up to $15,525, compared to $15,335 in same quarter last year.
- The average vehicle grade dipped from 3.25 in 3Q 2020 to 2.87 in the 3Q this year.
- Average damage estimate leaped from $1,599 in 3Q 2020 to $1,947 in 3Q 2021.
- Average vehicle mileage in 3Q was 87,233, compared to 74,433 in 3Q 2020.
“Volume kept creeping down more than expected,” said Joe Miller, vice president of client experience for AutoIMS. “We witnessed a spring bump, but as late summer checked-in it became clear that demand is still high, and the chip shortage supply strains still there. From what we see with commercial volume at auctions, it remains more depressed than expected.”
Meanwhile, average vehicle prices are hovering in the $16,000 range compared to more the more typical averages of $12,000 to $13,000 in previous years, Miller said. The inventory moving through auctions now varies widely, including repossessions, off-lease and off-rent vehicles that range from salvage condition to high-end late-models with low-miles, he added.
As the COVID Delta variant recedes amid higher vaccination rates and immunity, the industry has gained more in-person, in-lane sales activity across auctions with increased dealer volume making up for much of the lost commercial volume, Miller said. “We’re seeing lots of arbitrage with wholesalers moving from one auction to another buying and selling to make a profit.”
The report also finds average days to secured has decreased slightly to 4.0 the third quarter, compared to 4.3 in 3Q 2020. “We’ll watch closely what happens to transportation times, noting a healthy jump in September,” the report states. “Transport continues to be an area of focus in our business and that of our clients.”
Electric Vehicles In the Lanes
As an added dimension to the quarterly report, which was launched for the 1Q 2021, AutoIMS has started including stats on electric vehicles moving through auctions — a segment likely to rise steeply this decade as more fleets pursue electrification and begin cycling out the vehicles.
So far, only 13,400 EVs were sold among the 750 AutoIMS client auction operations across the U.S. and Canada this year, comprising less than .5% of total vehicle volume, Miller said.
AutoIMS plans to track the growing EV segment as adoption rises and will consider adding an average battery quality metric once sufficient data accumulates.