What Quality of Used Inventory Are You Buying at Auction?

I recently spoke with one of our new dealers at Auto Auction Review.

He’s a buyer at a 3-rooftop group in Atlanta and, like many of us, sources a significant number of vehicles from the auction, primarily under $20K inventory.

He mentioned that over the last few years, the quality of vehicles he’s bought (from auction, rental, Openlane, ACV) has deteriorated.

As expected, this started with COVID, and with the shortage of new cars manufactured during the 2020-2022 “supply chain” crisis, many auction vehicles now have higher mileage and require more recon. (think axles, tires, brakes etc)

In fact, his stores often lose money on the front end of these units, pac included.

And here’s another issue…he’s spending a lot more time dealing with arbitration.

He’s noticed it takes anywhere from 7-12 business days to unwind an arbitrated unit or get an adjustment from the auction.

Recently, he did a quick study on the vehicles bought via Simulcast in September 2024 for his group, and the results are fresh.

Here’s what he found…

-35 vehicles bought via Simulcast/OVE from Manheim Auctions
-7 units placed in arbitration
-A 20% arbitration rate

Small sample size? Sure. But it’s clear the quality of vehicles he’s purchasing from auctions has dropped – and it begs the question….

Are condition reports really accurate?

So, here’s what I’m wondering…

-Should sellers be held accountable if they consistently have high arbitration rates? (reduced seller ratings are No-Bueno)
-Should buyers be compensated for the time and effort required to unwind deals?

I’m not taking a position on this yet, but these are important questions that need asking…

-Are you satisfied with the represented quality of used inventory at auction?
-Are you spending too much time dealing with arbitration?

Should auctions be held to higher standards when representing vehicles?

How does your dealership handle these issues? Does your group even see this as a problem?

Let us know in the comments.

Remember… Review, Rate, Resolve!
Cheers,
Bob Manor
Co-Founder, AutoAuctionReview.com