Over the past few years, auction houses have seen some of the biggest increases in car values, so does this mean consigning your car to auction is the best route to market for your classic, and if so, how do you go about it?
Collectors Encroach on Trade Buyers’ Domain
Years ago, the only real customers of the auction houses were the trade itself. An auction was the place to buy and sell, an automotive wholesaler for dealers, if you like. Unwanted stock sold, desirable stock bought. Nowadays, however, they have become a big business on their own with buyers and collectors turning up in droves in the hope of finding their own bargains. The reality is slightly different. Headline figures have been achieved at some of the biggest international sales, which means that prices have increased for certain marques, and the trade is being replaced by buyers. Does this then mean that it is the best place to sell your beloved classic then? If you do decide that consigning your car to auction is the best option, there is quite a lot to consider. Here are some tips to keep in mind.
- Be Wary of Previous Auction Results
The first thing to bear in mind is not to use previous results for a car as an absolute price barometer. Yes, obviously they will give you a “feel” for the market for your car, but don’t automatically assume that the headline figure achieved for the last Ferrari 275 GTB/4 to cross-the-block will be what yours makes. Do your research. Did that car have a particularly significant provenance? Was it original? You can’t expect Grade A money for a Grade C car, so be realistic. Matching numbers, size of history file, competition use will always add to desire. And remember, there will always be the factor of a couple of buyers who were there who will have both desired to own the car, and nothing gets people more determined in a sale room than the thought of losing a car. Well, that and the fuel of champagne of course.
- Know Your Car’s History
And another word of caution is to be very clear on your car’s title and history. These are very visible sales now, and anything that is slightly “murky” will be found out, very publicly, and thus hurt a car and its value for years to come. You need to be aware that the world in which these cars move is very small, and mud sticks.
- Timing is Key
Factoring in timing is important because depending on the car, certain auction houses will be able to offer you a headline sale. Bonhams, for instance, is the only auction house at the three big Goodwood events, which are now attracting a world-wide audience. These can be significant sales, and become a social event for big collectors, so they can potentially offer a good turnout.
Talk to the auction houses about your car, but educate yourself beforehand and be realistic. With most auction houses posting results on the internet, look at the results achieved at previous sales, and not just the prices. What percentage of the sale lots actually sold? This will give you a good indication of the turnout. Also, find out if there are any similar cars to yours already consigned for that sale. Too many examples of a certain model will dilute the buyer’s appetite.
- Insurance Valuations Can Be Helpful
It can be a reasonable guide, but did you have the car valued for insurance? If so, it will be based upon what it would cost you to replace your car if it was ever stolen or written off. A lot of dealers offer this service, and it may be a good indication of the car’s true value in the marketplace. Rare cars are slightly harder to value, and the old adage of a car only being worth what someone is willing to pay for it can never be truer than at an auction, so be realistic of you do want to sell it, but on the flipside, don’t feel pressured into doing so.
- Don’t Forget About Auction Fees
And speaking of results, keep in mind that the auction house charges both the buyer and seller. A percentage of what the car achieves will be charged to you, so don’t automatically assume that when the hammer falls at a price, that’s what you get back. Be fully aware of their terms and conditions before you consign the car to them. Many are open to negotiation too, so just as you would haggle with a dealer when buying, feel free to do the same when consigning your car to auction. And remember, this is now a big market, so there are other auction houses to consider.
Recapping the Important Factors
- Do your research on prices, sale results and where might be the best place to sell
- Be clear and realistic on your car. Don’t try and hide anything, or set your bar too high. An unsold car due to dubious history or the reserve being too high gets remembered.
- Talk to the auction houses, and find the right one for you and your car
- Lastly, understand the terms and conditions before you sign. When the hammer falls, everyone should win.