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How used car dealers buy at auction – here’s what I learned for my AI Car Dealership project

  • I spend a day at the car auctions with a seasoned used car dealer
  • Car Quay’s Jamie Caple shows me how he buys cars
  • Experience helps give me some ideas on how AI can help me in the future

Time 7:49 am, January 20, 2024

I’ve quickly realised that becoming a successful used car dealer isn’t really about selling cars at all – it’s about buying them.

As one seasoned used car dealer professional recently told me ‘anyone can sell used cars, but not everyone can buy them’. 

And, as with any seasoned advice, it’s usually right. 


I certainly experienced this first hand during my recent work experience stint at award-winning used car dealer Car Quay in Derby.

In our last video update you saw me work with boss Jamie Caple and his team, learning the art (or not as the case may be) of selling used cars.

In this latest episode (video above), I’ve been shown the other side of the business and how Caple works hard to keep his used car dealership stocked.


Our used car dealer is being assisted by AI as much as possible and I have big plans for it to help take customer enquiries, value part exchanges and even do deals.

However, a big part of the AI plan is assisting me find the right used car stock to buy. I want AI to help shortlist vehicles for my dealership from the many hundreds on offer in trade auctions every day. Whether that’s possible, I don’t know yet, but I will certainly be trying. More on that soon.

When I visited, Caple had more than 250 cars in stock and he told me he needed to buy ‘around 50 a week’ to keep the machine fed. That meant buying cars from auctions.

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‘Sites like Motorway or Carwow just don’t work for us as I need to buy in volume and at speed and that means a proper car auction,’ he explains.

Caple spends at least a day a week at the car auctions – usually frequenting G3, Manheim or Aston Barclay sales in Leeds. 

‘I love the auctions,’ he tells me.

‘Getting out there and seeing the cars, chatting to the traders and enjoying a bacon sandwich – what’s not to love! 

‘It’s a great way for me to buy cars as I can buy in bulk, quickly, and they’ll turn up on a transporter with all the documents a week later. It’s simple, but importantly, efficient.’

Caple – who won Dealers’ Dealer at our recent Used Car Awards – first talks me through how he shortlists cars in the auction catalogue.


We spend an hour in his office looking through the next day’s sale, using his experience to pick cars he knows sell well on his site.

He uses Auto Trader’s dealer portal to work out what retail price the cars could be set out, adjusts for where he wants his price position to be when he advertises them (under the competition) and then works back from that what he is happy to pay.

Caple explains for his used car dealership he likes to have a £3,000 starting margin in cars. That sounds a lot, but when he explains the overheads, reconditioning costs, warranty allocation, and chance of these cars returning with problems, I understand why he wants a decent buffer.

 

What I am quickly realising is you have to be brave buying and selling used cars. What many consumers fail to realise is that car dealers have to follow strict consumer rights legislation which means fixing problems if they arise after purchase (and rightly so). 

This means they need a buffer in the car to protect against this, because while most will sell to happy customers, some will bounce back with costly problems – and the good dealers (like Caple) sort them out. And that costs money.

Caple notes down his target list with a registration, a CAP trade value and Auto Trader’s retail price valuation and we have a plan for the sale.

I drove to Derby in a DS7 Sportback – a car which I strangely enjoyed. It was certainly comfortable and with a back in desperate need of surgery, that was welcomed. But the spongy seats weren’t the real reason for picking it – no, it was the fact it has ChatGPT built in.

On the way to the Aston Barclay sale, Caple asks it for some advice on how to buy cars at auction. In a voice that would never rival Knight Rider’s KITT, it gives us some practical tips on what to do.

‘That’s amazing,’ says Caple.

‘Most of those things I have already done, but that’s decent advice for sure.’

My eventual plan will be to deploy AI a little smarter than asking it for some tips – I actually want it to eventually bid on the cars for me (if that’s even possible). 

At the sale, I observed (over a pork baguette), Caple perusing the cars, placing bids and winning around 10% of those on his list.

‘I have a max I can go to and that margin is really important to me, so if I can’t get them and get that three grand start I won’t buy them, it’s as simple as that,’ he explains.

He ignores some ropey cars that looked lille prime targets online and he explains why he thinks it’s vital to come to the auctions in person.

‘You can really look at the cars here and assess in your head the reconditioning work that is needed,’ he says.

‘I will never buy cars online. it just doesn’t work for me.’

He gives me some top buying tips too, including never buying a car with a damaged headlight, wing mirror or panoramic roof with a broken blind. 

‘I’ve had horrible problems with all of those things and they are very expensive to fix – just avoid them,’ he added.

What shocked me the most was some of the damage the cars had that were hard to spot without being there in person. Auctions do grade cars and the Aston Barclay system looked good, but sometimes the extent of issues don’t really hit home until you see them.

What was obvious, though, was the efficiency. So far, I’ve been monitoring the daily sales on Motorway and Carwow for stock and I can see why they would be harder to acquire cars at the quantity Caple needs.

Caple’s top tips for buying used cars at auction were pretty obvious. Having a plan in advance, so you know what your targets are and how much you’re willing to pay, is key.

Giving them a decent once over as they drive into the hall – and before as they’re lined up – was also important. I could see you can make a far better assessment of recon costs when the car is front of you.

It certainly made me want to give buying cars from an auction a go. In fact, Aston Barclay are setting me up with an account at the moment and I’ll certainly be making a trip to a sale soon.

However, by then, I hope AI will be helping me shortlist the stock, using the tips I learned from Caple and elsewhere, in advance.

James Baggott's avatar

James is the founder and editor-in-chief of Car Dealer Magazine, and CEO of parent company Baize Group. James has been a motoring journalist for more than 20 years writing about cars and the car industry.



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