Auction Sites Are Taking Over Used and Classic Car Buying
While going through a dealership may be the ‘typical’ car buying method, it’s by no means the only one. Especially if you’re trying to score a classic vehicle, auction sites like Rad For Sale and Bring a Trailer are excellent alternatives. But increasingly, these websites are changing from second choices to primary ones. However, is the rise of car auction sites here to stay, or is it just a temporary peak?
Auction sites are helping boost sales of used and classic cars
In the past, the online auto auction scene was dominated by websites like eBay Motors. But now enthusiasts can turn to sites like Cars and Bids and what is arguably the dominant website, Bring a Trailer. And as the COVID-19 pandemic forced many in-person car auctions to be canceled, postponed, or moved online, the online ones quickly filled the gap, Automobile reports.
In 2020, Bring a Trailer sold over $400 million worth of classic cars, Hagerty reports. That’s 66% more than it did in 2019. And 2019 saw a 41% revenue increase compared to 2018, NYT reports. Plus, the site’s prominence is such that it often gives sellers a boost in their cars’ final sales prices compared to local auctions, HotCars reports. All of this explains why, in the rush to digitize during the pandemic, ‘traditional’ auction houses were often scrambling to keep pace with BaT, Automobile reports.
However, it’s not just classic car auction sites that are reporting increased sales, Hagerty reports. Websites focused on newer used cars are also seeing greater traffic and revenue, even ones that don’t cater to everyday consumers. The dealer-to-dealer car auction site ACV Auctions, for example, “saw a tremendous jump” several months after the pandemic began, Car and Driver reports. And online auction sales have risen enough for Cox Automotive to invest $40 million over the next two years into improving its condition report technology, Automotive News reports.
But what’s behind this growth car auction sites are experiencing?
Why have some car auction sites become so popular?
Arguably the biggest factor today for car auction sites’ growth is the pandemic. But not necessarily in the ways you might expect.
Because of various production shutdowns from the virus and chip shortages, new cars are hard to find. And with less cash on hand, buyers turn to used cars over new ones, Reuters and CNBC explain. As a result, used car prices increase as the inventory shrinks. Thus, auction sites that specialize in lightly-used cars see more revenue and sales. And with online tools, it’s easier than ever for consumers to shop around for exactly what they want while maintaining social distancing, Car and Driver reports.
However, going online has another benefit: accessibility. Before Bring a Trailer or these other car auction sites, bidding on a vintage car meant traveling somewhere in person. And that’s expensive and time-consuming for both the bidders and sellers, the LA Times explains. Now, though, anyone can tune into an RM Sotheby’s live stream or browse on Rad For Sale and put in a bid.
And for someone who’s stuck at home with some extra money and time, it’s extremely easy to go from window-shopping to bidding. How many times has that late-night Amazon crawl turned into an unexpected package delivery several days later? Same thing, only replace that bed-sized stuffed penguin with a classic Alfa.
But car auction sites have something else going for them: community. When you click on a BaT or Cars and Bids listing, you don’t just see all the photos and videos someone took of their car or bike. You also get a chance to comment and communicate with the seller and other enthusiasts, to discuss the car, things to watch out for, or just to gush over it. The best car auction sites foster these sorts of connections, which is why they grow, Forbes reports.
Will this trend continue?
It’s difficult to say how much of the used and classic car market will be dominated by auction sites going forward. As an example, since launching as a dedicated auction site in 2014, Bring a Trailer has grown to roughly 400,000 users, Car and Driver reports.
For the former in-person auctions like RM Sotheby’s, likely, they won’t fully digital, AN reports. But the online aspect will probably remain due to the ease of access. And with the return of in-person events, auction websites’ dominance may fade somewhat.
Still, they’ve proven that they have a winning formula.
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