Know What You Have Before You Buy/Sell It
Risk comes from not knowing what you are doing.
— Warren Buffett — wise words for every business.
By the time I opened my own lot, I had learned enough from my father to know my edge.
I rented space on Bailey Avenue in Buffalo, a stretch of road locals called the Golden Mile. It was lined with used car dealers, one after another, each with their own angle. My neighbors included places like Smiling Ted's and Gerry Gradel’s. The immigrants running those lots in the 1980s were mostly European, like my father. Today, the same stretch is run by families from Iraq, Myanmar, and Somalia. Different countries, same hustle, same street.
My partner and I called our place the home of the $1,000 car. It was a joke, but not entirely. We bought cheap, cleaned well, and sold fast. Not every car dealer is selling $10,000 cars, but thousands are selling inexpensive vehicles for everyday customers.
My specialty was detail and curb appeal. I looked for cars that ran well but looked rough. A full detail from engine to trunk, rust-proofing sprayed on the wheel wells and frame right before the sale, and the car would stand up straight. My father called it stem to stern. I called it knowing what buyers see first.
That approach worked because I knew exactly what I had before I bought anything. A car that runs and just needs attention is a different animal than a car that looks good but has problems hiding underneath. Confuse the two and you will lose money every time.
The Van on the Side of the Road
One afternoon I spotted a 15-passenger van parked on the side of the road with a for-sale sign in the window. It had windows all around, standing tall. Other than some cosmetic wear, dirt everywhere, and an interior filled with garbage, it looked ready to move. It was outside my normal price range, but it looked solid. I paid $3,000 for it, a lot more than I would usually spend on a single vehicle. But without risk there is no reward… right?
My partner Mike took one look and said: "Dude, you messed up. Something is not right, three grand for that, it's worth 8k all day long."
I was annoyed. I thought he was sore because my find that week was better than his. But his words stuck in my throat. So I dug deeper.
The VIN on the dash matched the engine block. Both matched the title. I was ready to relax. Then I checked the VIN stamped into the back seat frame.
Different number. Crap!
I found two VINs in that van. I took the title and both numbers to the Buffalo Police to make sure it wasn’t stolen. The officer looked it over and told me the title was clean, but the second VIN belonged to a flood vehicle. Someone had taken two wrecked vehicles and built one from the usable parts. The police called it a common situation. They were not wrong.
This practice has a name in the trade. Some call it a frankencar. Some call it a title wash. The result is the same: a vehicle with a hidden history that can blow up on the buyer after the sale, and on the seller before it.
The police were not especially interested. No theft, no active crime, bigger problems on their plate. But selling that van without telling the buyer what I knew was not something I could do. I grew up in a family with rules: “do the right thing,” and “why lie when the truth will do.” My partner laughed at me, and told me to sell it without disclosure. I called my father.
He said: “sell it with full disclosure.”
I will explain exactly what full disclosure means and how to do it correctly later in the book. The short version is simple: put the known issues out front, even on an As Is listing, so the buyer feels like you have their back.
So I cleaned the van, rust proofed the wheel wells and put it out front. Three days later a Baptist minister came in looking for a van for his church. I told him the whole story. He laughed, said I was a breath of fresh air, asked if I had ever thought of converting and could I sing?
A VIN Check Is Never Just One Check
Carfax and AutoCheck did not exist at the time of the van story. Most people look at the VIN plate on the dash, visible through the windshield on the driver's side. That is where the conversation starts. It is not where it ends.
A vehicle has VINs in multiple locations. When those numbers do not match, something is wrong. Before you agree to a price, check every location you can access.
On most passenger vehicles, look at the dash plate, the driver's door jamb sticker, the engine block stamp, and the firewall. On passenger vans and larger vehicles, also check the seat frames. On trucks, check the frame rails. Any mismatch across those points needs an explanation before money changes hands. Once you find the core niche vehicles you like to sell, learn the VIN locations for that type. YouTube is a great resource for this.
A VIN history report is the next step. Carfax and AutoCheck are the two most widely used paid services. The National Motor Vehicle Title Information System, known as NMVTIS, offers free checks through approved providers and covers title brands across all 50 states. Run at least one report on every vehicle before you buy or price it.
A report will show you the title history, any reported accidents, odometer readings at each title transfer, and whether the vehicle was ever branded as salvage, flood, rebuilt, or junk. It will not show you everything. A vehicle that was damaged but never reported to an insurer will have a clean history report. That is why the physical inspection matters as much as the paper.
Title Status and What It Really Means
The title is the single most important document in any vehicle sale. What is printed on it determines where you can sell, who will buy, and what the vehicle is worth. Get this wrong and nothing else matters.
A clean title means the vehicle has no known liens, no salvage history, and no brands on record. It is the easiest title to sell and draws the widest pool of buyers. Most auction platforms accept clean title vehicles without restriction. When you buy a vehicle with a clean title, make sure the seller states it clearly on the bill of sale: this vehicle is owned free and clear with no liens or title restrictions. Never accept a verbal agreement on this. Not everyone you deal with is honest, and a written statement protects you when things go sideways.
A salvage title means an insurance company declared the vehicle a total loss at some point in its history. The vehicle may run fine. It may have been fully repaired. But the brand stays on the title permanently in most states, and it will reduce buyer interest and final price at every auction you run it through.
A flood title, or flood brand, means the vehicle sustained water damage significant enough to be reported. Flood vehicles are among the riskiest to buy and resell. Water damage works its way into wiring, sensors, and structural components long after the interior dries out. What looks clean at purchase can fail six months later on the buyer's watch.
A rebuilt title means a salvage vehicle was repaired and passed a state inspection to return to the road. Some states allow rebuilt titles. Others do not recognize them at all. Know your state's rules before you buy anything with a rebuilt brand.
A lien on the title means a lender has a financial interest in the vehicle. You cannot legally transfer a title with an open lien. Before you buy, confirm the lien has been released. Before you sell, make sure your own title is clear.
Title rules vary by state. Some states have stricter branding laws than others. If you operate across state lines, know the rules in every state you buy and sell in. The platform chapters later in this book will cover which titles each major auction accepts.
How to Assess a Car Honestly
The biggest assessment mistake sellers make is deciding what they want the car to be worth before they look at it. Once you have a number in your head, everything you see will try to confirm it. Fight that.
Start with the exterior. Walk around the entire vehicle before you open a door. Look for panel gaps that are uneven, paint that does not match across panels, overspray on rubber trim or glass, and bodywork that sits slightly off. These are signs of past repairs. Repairs are not automatically a problem, but undisclosed repairs are.
Check the underside. Look at the frame rails, the floor pans, and the wheel wells. Rust that is surface level is cosmetic. Rust that has eaten through structural metal is a problem that affects both safety and value. The van I bought had rust hidden inside components that looked fine from the outside. That is where flood damage hides.
Open the hood. You do not need to be a mechanic to notice oil that looks like chocolate milk, coolant that is brown instead of green or orange, or belts and hoses that are cracked and dry. Any of those signs means the engine has not been maintained, and unmaintained engines create unpredictable auction outcomes.
Start it and listen. A cold start tells you more than a warm one. Ticking that clears after a minute is one thing. Ticking that stays is another. Smoke from the exhaust on startup, especially blue or white smoke, is a signal worth investigating before you commit to a price.
Check the interior for water stains, musty smell, or mud in the seat rails. Flood vehicles often look dry long after the water is gone. Lift the carpet in the trunk and on the driver's floor. Check the seat brackets for rust that does not match the age of the vehicle.
If you have any doubt about the mechanical condition and you are not a mechanic, pay for an inspection. A pre-purchase inspection at a shop costs between $100 and $150. On a $3,000 vehicle, that is cheap insurance. On a $10,000 vehicle, it is mandatory.
The Cost of Overestimating
When I bought that van, I paid $3,000 because I thought I had a $5,000 vehicle. I did not. I had a $3,800 vehicle with a complicated history. That gap cost me time, stress, a police visit, and most of my margin.
Overestimating your vehicle is the most common and most expensive mistake in this business. It happens in three ways.
First, sellers overestimate condition. A car that looks clean from ten feet away is not always clean at arm's length. Buyers at auction walk the lanes. They open doors, look underneath, and start engines. If your description does not match what they find, they will either walk away or demand an adjustment after the hammer drops. Both outcomes cost you.
Second, sellers overestimate title. A salvage title is worth less than a clean title in every market. A flood title is worth less than a salvage title in most markets. If you price a branded vehicle at clean-title money, your listing will sit until you drop the price or pull it.
Third, sellers overestimate demand. A 15-passenger van is not a sedan. A diesel pickup with 180,000 miles is not a daily driver to most buyers. Know your buyer pool before you set your reserve. The narrower the buyer pool, the lower your realistic ceiling.
The fix for all three is the same: assess before you price. Walk the car, run the VIN, check the title, and then look up comparable sales on the platform you plan to use. Comparable sales are the only honest measure of what a vehicle is worth in your market right now.
My father had a version of this rule too. He never paid more for a car than he could afford to lose on it. If the deal went wrong, he needed to still be in business the next day. That discipline saved Cheerful Motors more than once. It will save you too.
To Summarize
Check the VIN in every location, not just the dash. Run a history report before you agree to a price. Know the title status before money changes hands. A clean title draws the widest buyer pool. A branded one narrows it fast. Assess the car honestly, walk it, start it, and look underneath, before you set a number. The cost of overestimating condition, title, or demand lands on you after the hammer drops.
