Return to physical auction helped improve confidence in the January used market reports SVA

Two years after being written off physical auctions are now being operated again by all the main vehicle remarketing providers according to Shoreham Vehicle Auctions (SVA).

Online only auction operators have succumbed to pressure from both vendors and buyers to operate physical auctions to create market confidence in Q4 23 to deal with the challenge of multiple price realignments.

Even those auctions that have been running ‘online only’ auctions since 2020 are now investing in refurbishing facilities and re-employing staff to get back to physical.

SVA was one of the first auction companies to return to physical auctions post pandemic in April 2020. Managing director Alex Wright has always been a strong believer that vehicles being driven through the auction halls in front of physical buyers brings confidence to the entire used market, particularly when trading conditions are tough.

“In Q4 prices changed daily as the market realigned itself to respond to a rise in new car production, improved used car supply and high interest rates that were negatively impacting consumer demand. Buyers were so uneasy they stopped buying vehicles which made vendors anxious which caused market distress,” explained Wright.

However, during Q4 buyers continued to attend physical auction to gauge market sentiment including online buyers that rarely made a physical trip to Shoreham. The industry came together to discuss the used market in the auction café over a bacon sandwich and a strong mug of tea with very positive results.

“Vendors joined the party to see market conditions for themselves and together the used market realised the pain in Q4 was a short-term blip and that the 2024 market was still strong,” he added.

During the tough Q4 used market the online only auction providers received huge pressure from both buyers and vendors to start trading physically again, particularly as they were often achieving lower conversion rates and prices than auctions trading in a hybrid physical/online capacity.

“The return to physical by all the major providers has helped provide additional market confidence in January which has translated into healthy conversion rates and prices. Even the online buyers are bidding on and buying more cars as they can see physical buyers in the halls. Reassurance is a big part of the used market and it is there in bucket loads now the entire industry has gone physical again,” said Wright.