Franchised dealers relied less on auctions for used vehicles in 2012 than they had in more than a dozen years, data from the National Automobile Dealers Association show.
On the other hand, those same dealers last year sold at auctions the biggest share of their used vehicles in more than a decade.
The shifts in auction use came as wholesale and retail used-vehicle prices hovered slightly below the peaks reached in spring 2011.
The average franchised dealership bought just 24 percent of its used inventory at an auto auction in 2012, down from 28 percent in 2011 and the lowest level since 22 percent in 1998, according to the annual NADA Data report released this month.
Conversely, trade-ins -- on new- and used-vehicle purchases combined -- provided 61 percent of dealers' used-vehicle inventory in 2012, up from 57 percent in 2011 and the highest level since 62 percent in 1999.
"Essentially, dealers are taking in more vehicles through trade that they never would have tried to retail before," says Jonathan Banks, an analyst at NADA Used Car Guide. "You see it all the way from the big public groups to the little dealers in rural areas. Trade-ins are in super-high demand."
Tim Walters, owner of Walters Elkland Chevrolet, a small dealership in rural Elkland, Pa., says he is keeping a lot more high-mileage trade-ins for retail sale than he used to because the off-lease vehicles he prefers to buy cost more than he wants to pay.
"Before, if a car had over 50,000 miles, I wasn't super interested in keeping it on the lot," Walters says. "Now, that's moved up to 80,000 or 90,000 miles."