Not only is it challenging for dealers to find used-car supply, the number of competitors vying for that supply in the auction lanes has increased.

According to the latest Wholesale Market Update from J.D. Power Valuation Services, there have been 1.37 million wholesale auction sales of vehicles up to 8 years old through four months of the year.

That’s down from 2.04 million the same period of 2021, representing a 33% drop.

Auction sales volume among mass-market brands has dropped from 1.73 million in to 1.16 million in the same time frame (a 33% decline), while premium sales have fallen from 302,000 to 205,000 (a 32% downturn).

In April, wholesale auction sales volume was down 40% year-over-year, with mass-market sales down 41% and premium sales off 32%.

“Competition in the wholesale marketplace remains fierce. Traditional dealers continue to compete against newer entrants, as well as fleet companies coming to bid and buy vehicles for their portfolios,” J.D. Power said in the analysis.

Of the auction sales declines, the company added: “This trend will continue for the foreseeable future as used supply is expected to tighten over the next few years.”

In a recent Market Insights report, Black Book provided some additional context on how the wholesale supply situation began in May.

“Historically, the first week of May is an exciting time for new-model-year launches and an increase of lease returns in the auction lanes. This year, like the past two years, has been plagued with microchip shortages and supply chain issues causing a significant reduction in both new inventory production and used lease and fleet returns in the wholesale market,” the company said in the report.

“After being mostly absent over the last two years, repossessions are starting to show up more often in lane,” Black Book continued. “Smaller independent dealers and rental companies continue to dominate the lanes with larger independent dealers jumping in when lower mile or cleaner vehicles come through. Franchise dealers are still around too, making appearances in lane for desirable models, but seemingly more prudent than in previous months.”

This year’s supply challenge continues what has been a persistent shortage of vehicles in the wholesale market.

There was a 10% year-over-year decline in the number of units that entered the lanes of NAAA-member auctions last year, according to the association’s annual industry survey. There was also a 4.6% drop in the number of cars that entered auction lanes and were sold, NAAA said.

The lion’s share of vehicles sold at auction (60.1%) was from dealer consignment, NAAA said. A little more than a third (33.9%) were lease/fleet/repo vehicles and 5.3% was factory volume. Meanwhile, 0.7% came from other sources.