BUYING
A max bid is a subtraction, not a feeling.
Most buyers set a max bid off MMR and a gut margin. The cars that lose money are the ones where the recon, the transport and the carry were never in the number. Here is the stack, line by line, and the screen that does it for every car on the run.
The stack
Start from the retail market, not from MMR. Find the live retail listings for this year, make, model and trim within a sensible radius, and take the median price at this car's mileage. That is the sell-for number. Then subtract everything it costs to get the car from the lane to a sold deal:
- Buy fee. Manheim's fee at that price tier, often $400 to $600, sometimes a flat fee written into the announcement.
- Transport. Real miles from the sale location to the store at your carrier's rate, with a minimum. A 212-mile car at $0.85 a mile is $180, not "about a hundred."
- Reconditioning. Read from the condition report: tires, glass, paint, interior, mechanical lines, at the store's own shop rates once the DMS is connected, industry averages before that.
- Carry. Floorplan and holding cost per day times the store's own median days to sell for that cohort. $8.50 a day is a common average; at 31 days that is $264.
- Target gross. The front gross the store expects on that cohort, from its own sold history.
What is left is the max bid. If it is below the current bid or below MMR by too much, the car is a pass, however nice it looks.
A worked example
2021 F-150 XLT, 54,000 miles, condition grade 4.2, running 212 miles from the store. Retail median at that mileage within 250 miles: $31,900. Buy fee $565. Transport $180. Recon from the CR: two tires and a windshield, $1,340. Carry at 31 days: $264. Target front gross for the cohort: $2,900. Max bid: $31,900 minus $5,249 equals $26,651. MMR is $27,300. The car is a buy up to $26,650 and a pass above it, and that number goes on the buyer's phone before the lane opens.
The 90 percent rule
A car priced at 100 percent of market sits. Most stores sell at 92 to 96 percent of the retail median. So the stack is computed at five price points, 80 through 100 percent, and the board shows what is left at each. If the deal only works at 100 percent of market, it does not work. If it works at 90, the buyer has room to win the bid and still price to move.
What the screen adds
Profit Gap does this for every eligible car on the run and on OVE: the cost stack, the retail median at mileage, the gap at five price points, and the max bid, with a verdict against the store's buying rules. The buyer sorts by gap and walks in with numbers instead of instincts.
One number per car he can hold to, built from the real retail market at that mileage and every cost between the lane and the sold deal, with the 80-to-100-percent sensitivity beside it.
Questions dealers ask
Where does the retail median come from?
Live retail listings for the same year, make, model and trim, adjusted to this car's mileage, within the store's radius and nationally for comparison.
What carry cost should I use?
The store's own floorplan rate plus holding cost per day, times the cohort's median days to sell. Until the DMS cost ledger is connected the board uses an $8.50 a day average and says so.
Does the max bid include the buy fee from the announcement?
Yes. Flat buy fees and transport assists written into the announcement text are read and applied to that car's stack.
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