ATLANTA -

A dealer who generally purchases numerous repossessed vehicles in the auction lanes has been witnessing a downswing in these volumes and asked  Manheim’s Tom Webb to explain the what is going on with these volumes.

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The Manheim economist wrapped up his monthly Auto Industry Brief by telling the dealer that his observations are not off target.

First, here is what the dealer wanted to know:

“As a major buyer of repossessed units at auction, I noticed a significant reduction in the supply from lenders and on average the units offered are older with higher mileage and in rougher condition. Is that the trend everywhere?

Webb began his response by simply stating, “Yes.”

Webb went on to mention that coming off of a peak of 1.9 million repossessed units in 2009, he estimated that total repo volumes declined by 19 percent to 1.55 million last year.

“Since auto loans made in 2009 and 2010 are performing much better than those made in 2006 and 2007 and at the same point in their life cycle, the typical repossessed unit sold at auction today is older,” Webb explained.

“The decline in overall volume and the higher age are trends that will continue in 2011,” he continued. “Although this is negative for you as a buyer, the reduction in both the frequency and severity of loss for lenders means that they can increase the availability of retail credit and ease terms.

“This helps you when you go to retail that repossessed unit that you were lucky to find at auction,” Webb concluded.