A friend of mine put a bug in my ear, talking about the real value of auctions is the data they collect. I got to thinking, what if I could use historical auction data to predict the price a car was going to sell for? I mean without inputting the time consuming options and conditions, just scan the vin and get a number. Then I could buy more cars selling below market value and sell them for a bigger profit.
I tried it. I built a simple web app that lets you scan the vin and it spits out a trend line showing the sale price and mileage of similar vins.
It wasn't perfect, but it was a fun project. I stood in the lanes at the auction, scanned vins just before they reached the block and had a number. Most of the time, it was fairly accurate, but it didn't really help. It was rare for a car to sell below the market value and if it did there was a reason you were not aware of.
Lesson: Buying the right car is way more important than steeling the wrong car.
As I dug into my used car role, I quickly realized the price is the price. If you go into an auction trying pay below market for inventory, you'll come home empty handed. There's an old saying that car dealers use, "You make your money when you buy, not when you sell." I don't agree...
The money is made on the turn rate and buying the cars that turn quicker will be way more profitable.