RB Global’s Recovery Pressures Copart as U.S. Auto Salvage Auctions Evolve

The U.S. auto salvage auction market is undergoing significant structural changes, with competitive dynamics shifting notably between its two primary leaders: RB Global Inc. and Copart Inc. The sector is poised for expansion as total-loss vehicles increasingly move through digital auction platforms, supported by advances in remote bidding technologies and buyer engagement. A key catalyst in these market shifts is changing insurer behavior, particularly by Progressive, the fastest-growing auto insurer, which has altered vehicle mix and claim severity, influencing salvage auction volumes. RB Global, following its 2023 acquisition of IAA Holdings Inc., is showing signs of operational recovery and growth. The company expects 2026 to be its first year of normalized performance post-acquisition, with anticipated mid-single-digit growth in gross transaction value (GTV). This growth is attributed to gains in market share, improved operational efficiency, and partnerships such as the expanded contract with the U.S. General Services Administration. RB Global's high operating leverage means modest volume increases might translate into substantial profit gains. In contrast, Copart is experiencing volume pressures, particularly due to its heavy reliance on domestic insurance totals amid rising uninsured driver rates and shifting insurer behaviors. Copart's insurance auction volumes have declined, while operating costs have increased. Despite this, Copart maintains strong financial fundamentals, benefiting from global buyer participation and cost controls that support operating margins. Analysts underline that total-loss vehicle supply dynamics are also influenced by broader trends including accident rates, repair cost increases, and vehicle complexity. Rising complexity drives higher total-loss determinations, favoring salvage auctions. Nonetheless, some consumers' financial strategies lead to fewer minor claims, impacting volumes temporarily. Progressive's market share gains have contributed to RB Global capturing a larger portion of salvage auction volumes, increasing from around 75% to approximately 90% of Progressive-related salvage units recently. This shift is expected to continue influencing market share balance in the coming years, potentially narrowing the gap between RB Global and Copart. Market data and stock performance reflect these shifting dynamics, with RB Global stocks showing relative stability compared to Copart's notable declines over the past year. The industry is now facing competitive pressures where execution, insurer relationships, and transparency in service levels are increasingly valued. Looking forward, structural factors such as increased miles driven, technological vehicle complexity, and rising repair costs underpin a positive outlook for salvage auctions. However, the competitive rivalry between RB Global and Copart will be decisive in shaping market trajectories, especially as insurer behavior and repair economics evolve. In sum, the auto salvage auction sector is transitioning from a period of consolidation and integration towards a phase characterized by intensified competition and growth opportunities. RB Global's operational rebuild positions it for increased market share gains, while Copart confronts significant challenges amid changing market conditions. Insurance carriers' preferences and market conditions will be key determinants of future leadership in this evolving market landscape.