How do I review a used car lot’s auction buying records?

Auction records show how a lot really buys. Request the bill of sale, fees, transport and any arbitration or announcement notes for each vehicle. Line them up with the reconditioning invoices and the final sale. This lets you see what the lot spent in total and how the vehicle performed.

Look at the mix. Does the lot lean on one auction or one seller group, or spread its buying? Does it buy the same kinds of vehicles repeatedly because they move, or chase low prices and then wait? Ask the owner how decisions are made and who does the bidding. If one person holds all the buying skill, think about what happens after that person leaves.

Check the unsold vehicles too. A vehicle that has sat on the lot since its purchase tells you something that a sales summary never will. Note any pattern in how long vehicles waited before selling. Ask about vehicles returned or disputed after the sale and how those were resolved. Have your accountant review how the lot values its stock on the books. Ask whether the lot’s auction accounts and buyer registrations will transfer to a new owner or must be set up again.

Key takeaways

• Match purchase, fees, reconditioning and sale for each vehicle in a recent sample.
• Look at which sources and vehicle types sold fast and which stalled.
• Ask whether auction accounts transfer and whether one person holds all the buying skill.