Used-car appraisal and pricing terms, explained.
Plain-English definitions of the used-car appraisal, pricing, stock and remarketing terms dealers use every day — from VIN decode and Damage AI to price to market, days in stock and digital tenders.
Appraisal and inspection
Appraisal
Also known as: Evaluation, Valuation
The process of establishing what a specific used vehicle is worth to a dealership, combining the vehicle's exact specification, its condition, reconditioning cost and current market demand.
An appraisal differs from a generic valuation because it is tied to one physical car — its VIN, its options, its damage and its history — rather than to a make, model and year.
Trade-in
A used vehicle a customer hands over to a dealership as part-payment towards another car.
The trade-in figure is usually the most commercially sensitive number in the deal, because it is set before the dealer knows what the car will actually sell for.
VIN
Also known as: Vehicle Identification Number
The unique 17-character code stamped on every vehicle built since 1981, identifying the manufacturer, the factory, the model year and the individual car.
VIN decode
Turning a VIN into structured data about that exact vehicle — make, model, variant, engine, transmission, colour and every factory-fitted option.
Decode quality varies sharply by region. Many decoders are trained on North American build data and return incomplete or wrong results for GCC and Australian vehicles.
Damage AI
Automated detection and costing of vehicle damage from photographs, producing a reconditioning estimate without a manual inspection.
Detection identifies the defect and its severity; costing applies the dealership's own labour and parts rates so the recon figure reflects that business rather than an industry average.
Reconditioning
Also known as: Recon
The work required to bring a traded vehicle up to retail standard — panel, paint, mechanical, tyres, detailing — and the cost of that work.
Recon is subtracted from the expected retail price when calculating what a dealer can pay for a trade-in. Underestimating it is one of the most common ways appraisal margin is lost.
OBD scan
Also known as: On-Board Diagnostics
Reading a vehicle's engine control unit through its diagnostic port to retrieve fault codes and verified vehicle data.
Condition report
A structured record of a vehicle's mechanical and cosmetic state, usually with photographs, used to support a valuation or a wholesale listing.
Pricing and market data
Price to market
A vehicle's asking price expressed as a percentage of the average market price for comparable vehicles.
A price to market of 100% means the car is listed at the market average. Below 100% is priced to move; above 100% is priced at a premium and will usually take longer to sell.
Cost to market
What a dealer paid for a vehicle expressed as a percentage of its current market value.
Cost to market is the cleanest early warning that a car was bought badly, because it is known the day the vehicle is stocked rather than the day it sells.
Sweet spot
The price band at which a given vehicle sells fastest without sacrificing gross profit.
Retail value
The price a vehicle is expected to achieve when sold to a private buyer through a dealership.
Wholesale value
The price a vehicle is expected to achieve when sold to another trade buyer rather than to the public.
The gap between wholesale and retail covers reconditioning, holding cost, marketing and the dealer's margin.
Residual value
Also known as: RV
The forecast value of a vehicle at a defined future point, usually expressed as a percentage of its original price.
Residual values underpin lease and finance products — the more accurate the forecast, the less risk the financier carries at the end of the term.
Book value
A published, generic valuation for a make, model and year, without reference to a specific vehicle's options, condition or local market.
Book values are simple but blunt. They cannot account for factory-fitted options, regional demand differences or the actual condition of the car in front of you.
Comparables
Also known as: Comps
Currently listed or recently sold vehicles closely matching the one being valued, used as direct evidence for a price.
Stock and performance metrics
Days in stock
Also known as: Stock age
How long a vehicle has been in inventory since it was acquired.
Holding cost accrues every day a car sits, so stock age is usually the single strongest predictor of whether a vehicle will make or lose money.
Inventory turn
Also known as: Stock turn
How many times a dealership sells and replaces its inventory over a period, annualised.
High turn indicates efficient buying and pricing; low turn usually signals overstocking, mispricing or the wrong mix.
Gross profit
Also known as: GP
The difference between what a vehicle sold for and what it cost, before overheads.
Return on investment
Also known as: ROI
Gross profit as a percentage of vehicle cost, adjusted for how long the car took to sell.
ROI is a more honest measure than gross profit alone, because a small margin turned quickly can outperform a large margin on a car that sits for months.
Conquest
Acquiring a used vehicle from a customer who does not buy a car from you in return, or winning a customer from a competing brand.
Wholesale and remarketing
Wholesale
Selling a vehicle to another dealer, auction house or trade buyer rather than to a retail customer.
Dealers wholesale cars that do not fit their retail profile — wrong brand, wrong age, wrong price band — rather than hold them.
Digital tender
A closed online sale in which invited buyers submit sealed bids on a vehicle or group of vehicles within a set window.
Unlike an open auction, a tender does not reveal competing bids, and access can be restricted to an OEM's own franchised network.
Grounded fleet
Ex-company, demonstrator, press or ambassador vehicles an OEM or large fleet is ready to sell.
De-fleeted
A vehicle removed from a rental, lease or corporate fleet and released for sale.
Arbitration
The dispute process used when a wholesale buyer believes a vehicle was materially misdescribed by the seller.
Systems and integration
DMS
Also known as: Dealer Management System
The core software a dealership runs its business on — stock, deals, service, parts and accounting.
Because the DMS holds the deal record, an appraisal tool that cannot write back to it forces staff to re-key data.
CRM
Also known as: Customer Relationship Management
The system a dealership uses to manage leads, customer contact and the sales pipeline.
PPSR
Also known as: Personal Property Securities Register
The Australian register that records finance owing and write-off status against a vehicle.
A PPSR check is standard practice before acquiring a used vehicle in Australia, because buying a car with money owing against it can mean losing the car.
Speed to lead
How quickly a dealership responds to an inbound enquiry.
Response time is one of the strongest predictors of whether an online enquiry converts, and it decays fast — minutes matter more than hours.
MCP
Also known as: Model Context Protocol
An open standard that lets AI assistants connect to external systems and query them directly.
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