Reading an auction condition report without getting burnt

Cosmetic grades, mechanical grades, red and amber items, V5 and mileage warnings — which ones are a price negotiation and which ones mean walk away.

Updated 1 August 2026 · 5 min read · Written for UK independent dealers

Buying at auction means buying on paper. You get a grade, a list of items, some photographs and a set of declarations, and from that you have to decide what a car is worth in the ninety seconds before it crosses the block.

The skill is knowing which entries are a cost you can price, and which are a reason to stop reading.

Cosmetic grade is a disclosure, not a deduction

Cosmetic grades — typically 1 to 5, best to worst — describe paint and panel condition. They are useful and they are routinely over-weighted.

The reason is that cosmetic work is optional. Whether a grade-4 car costs you anything depends entirely on what you do about it, and what you do about it depends on your market. A £4,000 runaround with a scuffed bumper sells with a scuffed bumper. A £24,000 car does not.

So a cosmetic grade should not be an automatic deduction from your bid. It should be a prompt to look at the photographs and ask what, if anything, you would actually fix — then price that.

Where cosmetic grade does matter directly: the very top of the range. On a nearly-new car, buyers expect near-perfect paint, and the work to get there is expensive.

Cosmetic grade tells you what the car looks like. It does not tell you what it will cost you. Only your own market and your own workshop rates do that.

Mechanical grade is a different animal

Where a mechanical grade is given — often A to E — it describes running condition, and it deserves much more weight than the cosmetic one, because mechanical work is rarely optional and rarely cheap.

Grades at the bottom of the scale, and any grade indicating an unknown or untested condition, mean you are buying a question. Sometimes that is fine at the right price. It is never fine at the wrong one.

Red, amber and green

Most inspection reports classify individual findings by severity. The colours are where the real information is, and the counts matter more than the grade letters.

Red items are the ones to take seriously. A red finding is a defect the inspector considered significant — something failed, something is not working, something needs replacing. One red item on an otherwise clean car is a cost to price. Three or four suggest a car that has not been looked after, and the ones they found are rarely the only ones there.

Amber items are advisories: wearing, deteriorating, will need attention. Individually cheap, collectively meaningful. Six ambers on a car is a prep bill.

Green is fine.

The useful habit is to read the count before the grade. A car with a decent overall grade and four reds is a worse buy than a mediocre grade with none.

The declarations that change everything

Certain entries are not about condition at all, and they should stop the process rather than adjust the price.

Insurance total loss markers. A recorded category marker permanently changes what the car is worth and shrinks the buyer pool considerably — finance is harder, some buyers refuse outright. If you take one it must be at a price that reflects that, and you must disclose it. Treating a category-marked car as a normal car is one of the fastest ways to own something you cannot sell.

Non-runner. Means what it says. Unless you have a workshop and a genuine appetite for the risk, this is a trade lot, not a retail one. "It probably just needs a battery" is optimism, not diagnosis.

Mileage not warranted. The auction is telling you the odometer reading is not guaranteed. That is a real reduction in value and a real problem at resale, because you inherit the same uncertainty and have to pass it on.

No V5 present. Recoverable, but it costs time and paperwork, and until it arrives you cannot sell the car. Price the delay as well as the admin.

Taxi, police, driving school, or unusual prior use. Legitimate cars, materially harder to retail, and buyers will ask.

Assured lots and claim rights

Where an auction house has inspected a vehicle and offers claim rights if it is misdescribed, that protection has real value — it is the difference between a mistake being recoverable and being yours.

Lots sold without that inspection are sold as seen. No claims, no recourse. That is not a reason to avoid them; plenty of good cars are sold that way, often more cheaply for exactly this reason. It is a reason to bid differently, because you are carrying risk the auction house would otherwise have carried.

Know which basis each lot is on before you bid, and know whether the fee for that protection applies to your invoice.

Building it into a bid

A practical sequence when you open a report:

1. Declarations first. Write-off, non-runner, mileage not warranted, no V5, unusual prior use. Any of these and the question becomes "is this a trade lot" rather than "what do I bid".
2. Red items next. Count them and read them. One or two you can price. More than that and you are buying somebody's neglect.
3. Mechanical grade. Weight it heavily.
4. Amber items. Add them up as a prep estimate.
5. Cosmetic grade and photographs last. Decide what you would actually fix, and price only that.

Then hold the recon estimate separately from your bid ceiling rather than folding it in. Your ceiling should come from what the car sells for and what you need to keep. The recon reserve is what tells you whether the deal still works once you have won it — and keeping the two apart stops you bidding against your own guesses.

The entry that should always stop you

If a report describes something you do not understand — an unfamiliar warning, an unexplained system fault, an engine noise noted without diagnosis — the correct response is to leave it.

There is another auction next week. There is not another £2,000.