- Car auction companies such as Hemmings Auctions and Bring a Trailer have seen a spike in people buying cars during the pandemic.
- Part of it, they said, is because people aren’t going on vacation and some choose to spend the money on a newer car.
- Others, because of economic uncertainty, instead elect to invest in concrete assets like classic cars.
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While the restaurant and retail industries face slow sales, sluggish months, and bankruptcies, the ongoing COVID-19 pandemic has had the reverse effect on the car auction industry.
Sales have been strong during the pandemic months, James Wyler, auctions director at Hemmings Auctions, told Business Insider recently.
Randy Nonnenberg, co-founder and CEO of car auction website Bring a Trailer, agreed — the numbers of both sales and bidders are way up on his site this year. He told Business Insider that there are 485,000 registered users on Bring a Trailer, and more than 205,000 of those are registered to bid. That’s up from the 130,000 registered bidders this time last year.
And from August to October of last year, Bring a Trailer sold 2,148 cars out of 3,172 listed — a 68% rate of sale. From August to October this year, the site sold 3,136 cars out of 3,963 — or a 79% rate of sale.
“That is a 47% increase in sold listings and our average listing sale price was also up 13%,” Nonnenberg said.
So, who’s buying?
To start with, car enthusiasts. “Anecdotally, people have just shifted priorities in 2020,” Nonnenberg said. “Most people aren’t spending on vacation so they are re-allocating resources. They’re spending time with family, in the garage, in a tighter radius around their homes, and with limited social gathering.
“All this points to individual enthusiast interests. For car people, that often means working on cars or buying a different car. There’s been a gut check — people are asking what they actually want to be doing.”
But it’s not just enthusiasts. It’s also people who have some extra money and a new perspective.
“When times are uncertain, people like to put money into a concrete asset, like a classic car, instead of investing it elsewhere like the stock market,” Wyler said.
On top of that, Wyler reasoned that buyers from two-driver households have realized that with so many companies offering work-from-home opportunities, they don’t need a second daily driver. The second car can be something fun, perhaps an old classic.
“For most of our buyers and sellers, this is a third car for them,” he said. “I hear people saying they want to take [the car] to shows, enjoy the weather, go out to dinner in it.”
For more on the state of car auctions amid the COVID-19 pandemic, click here.