How many cars are sold at auction each year in Australia?September 11th 2018
How many cars are sold at auction each year in Australia
The used car market is rapidly expanding. A tremendous growth in the market has been recorded over the past few years. The volume of the Australian used car market is currently estimated at over 3.5 million units per annum. Over the past 5 years, the market has averaged an annual growth rate of about 5%. Although significant growth is still being recorded, the market is expected to peak in the coming years, after which a steady sales volume will be recorded. Auctions remain a driving force behind the used car market as many dealers obtain their stock at auctions, and with near to 600,000 vehicles sold through auction in Australia each year. The possibility of getting a very good car at a bargain price seems to be the major driver behind the increasing popularity of the auction market.
The American multinational company Manheim has locations in all the capital cities of the Australian, as well as many others in Europe and North America. Manheim sells vehicles of all prices via auctions every year with the bulk of sales volume coming from motor dealers.
Pickles ranks high among the largest car auction companies in Australia. While it may not boast the same international reputation as Manheim, it definitely has succeeded in the Australian car auction market. The family-owned company serves numerous clients, including the Australian government, local councils, state governments, auto dealers, etc. Pickles reports that it sold more than 228,000 vehicles alone through its auctions in the last financial year.
Why do dealers buy and sell through auctions?
Car auctions have become a dealer’s favourite all over Australia. Every dealer hopes to make the best profit possible from any vehicle sold. To achieve this they have to buy at the lowest possible prices. Auctions present the perfect platform to buy cars at ridiculously cheap prices, so you can understand why dealers rely on auctions to stock their inventory. Auctioneers also recognise that the market share is occupied by car dealers. As a result, they organise auctions where they sell bulk numbers of vehicles sell at wholesale prices. At the end of the day, it’s a win-win for both parties.
On the other hand, the opportunity to sell large volumes in record time drives dealers to sell cars at auctions. Keeping a car in the inventory isn’t exactly cheap, and the value of the car depreciates with every passing day. Often these dealers actually obtain loans to buy the cars in the inventory. Unlike the value of the car, the loan appreciates every day. Furthermore, the probability of selling a car in an inventory reduces as the car gets older. You can easily see that there’s a myriad of problems that come with keeping a car for too long. Dealers don’t mind the potentially huge profit dips that come with selling at an auction as long as the sale is instant.
How much can you expect to save buying at auction
The amount you’ll be saving when you buy at an auction will depend on a number of factors. But the fact remains that there’s a huge potential for savings. The auctioneering company, the make and model of the car you’re buying, the mileage, and its condition also influence the amount you’ll save when you buy a car at an auction. Ultimately, your savings will depend on your wants and your flexibility. But you’ll still be on the right track if you’re thinking of saving a few thousand dollars.