Auto Auction Glossary

Actual Cash Value (ACV)

The fair market value of a vehicle before the loss occurred, used by insurance companies to determine total loss thresholds and payouts.

Arbitration

The process of resolving disputes between auction buyers and sellers, typically regarding undisclosed vehicle defects or condition report inaccuracies.

As-Is

A sale condition where the vehicle is sold without any warranty or guarantee. The buyer assumes all risk for the vehicle's condition.

Buy Now

An auction listing option that allows a buyer to purchase the vehicle immediately at a set price, bypassing the competitive bidding process.

Buyer Fee

A fee charged by the auction house to the buyer, typically calculated as a percentage of the purchase price or on a tiered scale.

Clean Title

A vehicle title with no negative brands or history of being declared a total loss. Clean titles command the highest resale values.

Comps (Comparables)

Similar vehicles currently listed or recently sold that are used to estimate a vehicle's market value. Quality comps match on year, make, model, trim, mileage, and location.

Condition Report (CR)

A detailed inspection report provided by the auction house documenting a vehicle's condition, including mechanical, structural, and cosmetic assessments.

Consignment

When a vehicle owner places their vehicle with an auction house for sale. The auction house sells on behalf of the owner and takes a commission.

Deal Score

A composite grade (A through D) assigned to auction listings based on profit potential, comp confidence, and risk assessment. Used to quickly identify the best buying opportunities.

Dealer License

A state-issued license required to buy and sell vehicles commercially. Required for access to dealer-only auctions like Manheim and ADESA.

Floor Plan

A line of credit provided to dealers by a lender specifically for purchasing vehicle inventory at auction.

Green Light

An auction designation indicating a vehicle has passed the auction's inspection and meets quality standards. Green light vehicles often come with limited arbitration guarantees.

Hammer Price

The final bid price when the auctioneer's hammer falls, before any buyer fees or taxes are added.

IQR (Interquartile Range)

A statistical method used to identify and remove outlier pricing data from comparable listings. Ensures valuation estimates aren't skewed by abnormally high or low prices.

Landed Cost

The total cost of acquiring a vehicle including purchase price, auction fees, transport, inspection, title fees, and any reconditioning needed.

Lane

The physical or virtual area where vehicles are presented for bidding at an auction. Large auctions run multiple lanes simultaneously.

Market Value

The estimated price at which a vehicle would sell in the current market, derived from comparable sales data.

Max Bid

The maximum amount a buyer should bid on an auction vehicle to maintain their target profit margin after all landed costs are accounted for.

No Reserve

An auction where the vehicle will sell regardless of the final bid price. No-reserve auctions tend to attract more bidders.

Profit Margin

The percentage of the retail selling price that represents profit after subtracting all costs. Calculated as (Retail Price - Landed Cost) / Retail Price.

Rebuilt Title

A title issued after a salvage vehicle has been repaired and passed a state safety inspection. Also called a reconstructed title in some states.

Reconditioning

The process of preparing a vehicle for retail sale, including detailing, minor repairs, safety inspections, and cosmetic touch-ups. A key component of landed cost.

Reserve

A minimum price set by the seller below which the vehicle will not be sold. If bidding doesn't reach the reserve, the sale doesn't complete.

Retail

The price at which vehicles are sold to end consumers, either at dealerships or through private sales. Retail prices include dealer markup and reconditioning costs.

Risk Flags

Automated warnings raised during deal analysis, such as salvage title, high mileage, old vehicle age, thin margins, or low comp confidence.

Run List

The list of vehicles scheduled to be sold at an upcoming auction sale, typically available 1-3 days before the sale.

Salvage Title

A title brand issued when an insurance company declares a vehicle a total loss, meaning repair costs exceeded a certain percentage of the vehicle's value.

Seller Fee

A fee charged by the auction house to the seller for listing and selling their vehicle.

Simulcast

Technology that allows remote bidders to participate in a live auction via internet streaming, bidding in real-time alongside in-person buyers.

Spread

The difference between the wholesale (auction) price and the retail price of a vehicle. A larger spread means more potential profit.

Title Check

The process of verifying a vehicle's title status, lien status, and history before purchasing. Essential for avoiding legal and financial problems.

Total Loss

When an insurance company determines that the cost to repair a vehicle exceeds a certain percentage of its actual cash value, typically 75%.

Transport

The cost and logistics of moving a vehicle from the auction location to the buyer's lot or dealership. Varies based on distance and carrier type.

VIN

Vehicle Identification Number — a unique 17-character code assigned to every vehicle, used for identification, history reports, and registration.

Wholesale

The price at which vehicles are sold between dealers, typically at auction. Wholesale prices are lower than retail prices.