CARY, N.C. -

Tight supplies and more competition for a shrinking pool of cars.

That’s the story in the wholesale vehicle market these days

Auto auctions had approximately 227,000 sales of vehicles up to 8 years in age last month, which was down nearly 37% year-over-year, according to J.D. Power Valuation Services’ latest Wholesale Market Update.

Sales volumes for mainstream segments were off about 36%, with premium segments down 42% from January 2021.

J.D. Power expects slower volumes “for the foreseeable future,” with used supply not bottoming out until 2024.

It’s a crowded market — just not with vehicles.

“Competition in the wholesale marketplace remains fierce,” J.D. Power said in the report.

“Traditional dealers continue to compete against newer entrants such as Carvana and Vroom, as well as rental vehicle companies coming to bid and buy vehicles for their portfolios,” it said.

In an interview with Auto Remarketing about commercial consignment trends, Joe Miller of AutoIMS pointed to how rental car companies are now buying more vehicles in the auction lanes than they’re selling.

“Normally, they’re one of the bigger sellers at auction,” Miller said.

Similarly, Black Book noted in its Market Insights report from last week that competition is heating up in the lanes.

“Large independent dealers seem to be making a comeback in the lanes and not just the near-prime and subprime sellers,” the company said in the report.

“Their resurgence is a good sign for the upcoming spring market, although it adds additional competition among rental companies, smaller independents and franchise dealers.”

Dealers are often buying cars from commercial consignors before they hit the auction lanes. 

After peaking in the spring, auction sales volumes from these commercial consignors spent most of 2021 at a lower level than 2020 numbers, sitting between 20-30% softer throughout the fourth quarter, according to the latest AutoIMS Industry View report.

Volumes from rental, fleet and off-lease channels “continues to just be super, super tight,” Miller said.

“The dealers are grabbing almost everything they can get before it gets to the auction.”