The auction market in the US has traditionally been dominated by two companies, namely Manheim Auctions, Inc. and KAR Auction Services, Inc., with them having an estimated 42% and 27% market share, respectively. However, analysts predict their position is bound to get disrupted with the rise of online-based auction sites that offer more competitive fees, a lower barrier to entry, greater convenience and faster monetization of used vehicle inventory.
Greater online buying confidence is also a major reason behind the displacement. With standardized inspection, VIN-based vehicle history, and vehicle guarantees, online car auction sites today offer both more safety and credibility.
The current on-going pandemic is also likely to accelerate this trend. Despite a lockdown in place, the majority of customers aren’t delaying their vehicle purchase. With physical auctions right now virtually impossible, the online car auction market is likely to benefit, attracting many first-time visitors, many of whom are expected to make the migration permanently.