Dealers bought a record share of their used-vehicle inventory from auto auctions in 1998, according to the National Automobile Dealers Association.
Thirty-one percent of the used vehicles dealers retailed last year came from auctions, NADA reported in its annual state-of-the-dealer report, NADA Data.
The rise of auctions as a source of used vehicles has been substantial since the early 1980s, when vehicles from auctions accounted for just 10 percent of the dealers' inventory.
Auctions owe that growth to the rental fleet repurchase programs in the 1980s and the expansion of consumer leasing in the 1990s, said Tom Kontos, director of strategic planning and market analysis for ADT Automotive Inc., an auction chain based in Nashville, Tenn.
'The program-car phenomenon gave franchised dealers their introduction to using the auctions that up until that point they may have shunned for a source of inventory,' said Kontos.
When fleet incentives and rental returns waned in the early 1990s, auto leasing picked up. Automakers disposed of off-lease cars through auctions, spurring more growth, said Kontos.
NADA statistics show that used-car unit sales were flat last year at 19.3 million. Dealers retailed 12 million used vehicles and wholesaled 7.3 million. The average price of a used vehicle sold by new-car dealers rose 3 percent to $12,500, from $12,100.