Car auctions, Are there any that a normal human being can afford?

There are a lot of people out there with a lot of money. Unless you also have that sort of money (certainly I don't), you often don't realize it. They can spend it however they wish. I have one close friend in that category. If it's in keeping a great car great, I'm all for it. There are plenty of great affordable cars, but those aren't as good for TV ratings. Most people with money know how spend it wisely. Some do not.

re. the title of this thread " ... are there any that the normal person can afford?"

No "normal" person would buy an old car. You have to be a little nutty to even think about it. Maybe a lot nutty.

Don

I resemble that remark. Dandy Dave!

Have you ever considered that all the sensationally

high prices on TV auctions may be hurting our hobby?

Sure, some cars are worth it; but there are far more

$10,000 and $20,000 cars in the hobby which TV rarely shows.

Time after time, when showing friends and acquaintances

my cars, I remark how affordable the hobby is. "You can

have a nice old car for less than a used Ford Taurus." They

are totally surprised, having gotten wrong impressions from TV.

Could fewer people therefore be looking into our hobby?

Would it be easier to increase taxes and fees on old cars

if politicians perceived that all old-car owners are wealthy?

re. the title of this thread " ... are there any that the normal person can afford?"

No "normal" person would buy an old car. You have to be a little nutty to even think about it. Maybe a lot nutty.

Don

It seems as though I'm seeing more negative reactions to this year's sale, both online and in 1 on 1 conversation. The most notable comment seems to be about "...crazy people with too much money..." in general terms. I have to ask, how many of you truly believe that the guy who pays $350K for a Camaro is ignorant, dumb, stupid or some ego-maniacal dim wit? I've been selling cars off and on for over 30 yrs. Everything from a Model A project car to a Model J Duesenberg, and a list so long of muscle cars I can't recall all of them. Within the hundreds of folks I've dealt with there's never been some mope just dying throw 1/2 again as much as the car's value just because he can. How did some of the televised buyers become able to bid what they do, win or lose?

Ladies n gents that's sour grapes, plain and simple. The majority of buyers with the loot to play are sharp about what they want. If it isn't them crawling in and under the car it's their agent or expert inspector that gives a thumbs up or down. I've been that guy several times. Why does 1 orange Yenko Camaro get bid to $225K and the one 6-7 cars later struggle to see $150K? Because the 1st one was a better car, PERIOD. Do any of us think that all 1932 Packard 900s are now worth $250K? I hope not. That car belonged to the late Mr. Bill Buddig. There was never a square inch of his cars out of place or in less than #1 condition. If you're a Packard guy you understand without words why that strong bid happened. The 33 12 behind it? Why so low? I don't know that car in particular but I can only guess that it wasn't nearly as crisp and well presented as the 900 regardless of the magic that TV cameras serve.

Every principal I've ever dealt with was nothing like what many say about the B-J bidders. To carry on about it? Well now, who would the ignorant one be then? He might be found over the top of his bathroom sink. Just sayin...

Sorry this is not always the case. I have seen cars sell at one auction that is lesser known. The buyer takes them down to Barrett Jackson, does nothing to them, and they sell for $10,000 - $20,000 more. Did they suddenly become better quality cars with nothing being done to them?

Again, I have been to auctions where junkyard quality cars sold for more than you would pay for a nice original or restored car. Why? because they were hyped as some fabulous "barn find collection".

Maybe an interesting story, but it adds no value.

Why do you think they have free alcohol, food, and slutty women in tight dresses standing by the cars during an auction? Does that increase the quality of the cars? I don't think so. I won't fall for that and pay too much. Some others might not either. But some certainly do, otherwise they wouldn't have that stuff. They do the same thing at casinos. It doesn't always work, but it certainly does enough that they keep doing it.

I remember about 30 years ago at a local auction run by the Kruse Corporation I went into the tent and noticed a rusted and I mean rusted 2 seat roadster with only seat frames, missing gauges, bent wheels and flat tires. I thought " what is that POS doing in here" Near the end of the day it came up for bid and rapidly went to $75,000. The bid was refused as not enough. Turns out it was a very rare Italian Sport model form the late 1930's and only a very few were left. Just goes to show things are not always what they seem.

^I think you were right at POS.

If it was that rare and THAT shot the owner should have sold it........

The junkyard quality cars I was referring to at the auctions I went to were domestic mid-1950's bottom of the line 4 door pillared sedans. No mystery rare models there. The one I was most interested in was the only 2 door hardtop there. A 1956 Packard 400. It had power windows (that didn't work, and a couple cracked ones), but no other major options. It had pitted chrome, ripped seats, rust and faded paint and was missing parts. It started, but had no brakes and they wouldn't let you drive it. It smoked and leaked fluids, all of them. I lost interest when it hit $5000. It sold for $20,000. I was looking for one at the time, and excellent condition ones were selling for $20,000 - $25,000. I don't think I missed out not bidding higher. The rest of the cars were in similar shape and went for similar prices. All because these were a "fabulous barn find collection" at auction.

As to going from one auction house to another, apparently someone spotted a car worth more and gambled that it would attract a higher paying bidder elsewhere. If you really know a lot about a lot of different cars/eras, and if you have the money to invest/risk, it can be done every year. It can be done going from one Mecum sale to another in the same year. A 69-71 Cobra Jet Mustang has a tier 1 value of $55-60K. You spot one at a less than popular sale and find out that it's the real deal, never rusted or properly restored, has good street cred in the form of Marti reports and documentation, the hammer price is $31K. Even after commission and transport as well as entry fees you're all in at $40K and you're confident that going into a hornet's nest of principals there must be 2-3 guys who see it as you do. I guess it's really criminal to market that car to the right venue and make a few bucks, right?

That's the difference in what you see and what I see, and the difference in the approach. Not once in my scenario did words come out that evoked ANY disrespect to that market, that sale. If anyone were to go into it thinking "...some rich azzhole will buy it there..." it would show. It would result in a no sale or a loss, and in my opinion it would be deserved. Perspective is important, and "...doing nothing..." isn't always true either. A weekend of detailing can mean 5 figures of profit, or is profit one of those dirty words too?

^I think you were right at POS.

If it was that rare and THAT shot the owner should have sold it........

I thought so too.

As to going from one auction house to another, apparently someone spotted a car worth more and gambled that it would attract a higher paying bidder elsewhere. If you really know a lot about a lot of different cars/eras, and if you have the money to invest/risk, it can be done every year. It can be done going from one Mecum sale to another in the same year. A 69-71 Cobra Jet Mustang has a tier 1 value of $55-60K. You spot one at a less than popular sale and find out that it's the real deal, never rusted or properly restored, has good street cred in the form of Marti reports and documentation, the hammer price is $31K. Even after commission and transport as well as entry fees you're all in at $40K and you're confident that going into a hornet's nest of principals there must be 2-3 guys who see it as you do. I guess it's really criminal to market that car to the right venue and make a few bucks, right?

That's the difference in what you see and what I see, and the difference in the approach. Not once in my scenario did words come out that evoked ANY disrespect to that market, that sale. If anyone were to go into it thinking "...some rich azzhole will buy it there..." it would show. It would result in a no sale or a loss, and in my opinion it would be deserved. Perspective is important, and "...doing nothing..." isn't always true either. A weekend of detailing can mean 5 figures of profit, or is profit one of those dirty words too?

Sorry, not all buyers and sellers at an auction are super savvy and knowledgeable, buying and selling the best of everything at exactly what they are worth.

I have already stated what happened at "barn find auctions" I have been to.

I was interested in a car on the west coast. I had a friend that lives there take a look at it and take pictures. I passed on it as needing too much work for too much money. It was then listed on Ebay with a lot of pictures. It sold for $7000. Too much based on the much better pics my friend sent me. One month later the new buyer had it on Ebay again with the exact same pictures, except all of the pictures showing flaws were removed. The seller claimed it had always been a California car, despite having Washington license plates in the pictures from the original owners listing. It sold for $17,000. While I have nothing against someone making an honest profit, this was obviously an unscrupulous seller. And the buyer was obviously not too bright either. Not questioning the license plates or recognizing it from the auction one month earlier, and spending that kind of money without properly checking it out. While this was an Ebay auction, I have seen the same sort of thing happen at live auctions.

Generalizing that ALL sellers pick up an undervalued excellent car to sell for an honest profit, and ALL buyers are knowledgeable snapping up great deals an fabulous cars at auction just isn't true. Sure, it happens sometimes. But there are also stupid buyers paying way too much, and unscrupulous sellers as well. That happens too. To claim otherwise is only telling half of the story.

This coming weekend I'm going to go look at a 51 Olds 88. It is dealer priced but it's about what I'm looking for in a car. I want a rust free 4 door 50's something with signal lights and relatively easy to maintain. The only other thing is it has to have is a automatic transmission so the wife can drive it. I gave my 49 Plymouth to my son in law to get him started on the hobby so that just leaves me with my 1919 Ford Model T touring car and I need another go fast car that car keep up with traffic for long trips and has a heater for cooler weather.. Consider this an open invitation to e mail me what you have.

a friend of mine has a 1953 pontiac chieftain custom catalina for sale in pennsylvannia, car has been restored, beautiful car. pull my chain if you're interested.

charles l. coker

1953 pontiac tech advisor

tech advisor coordinator

poci

I'll end my comments with 2 facts. I never said ALL were sharp and educated, and as obvious as the sunrise and sunset there's exceptions to any rule or venue. Also, those who I've dealt with over decades were all very sharp and knowledgeable about what they wanted and what to pay. Over n out...

I don't know that auction buyers are stupid, but they are motivated by different factors than many other buyers. It's been my experience that there are a few different types of buyer at auctions, all with different motivations.

In regards to this conversation, there are indeed buyers for whom price is truly no object. Money that we'd think was all the money in the world is merely pocket change to these guys. This is not a political statement, but the disparity of wealth in this country is truly STAGGERING. To me, a $50,000 car is an attainable dream someday, but I don't dare dream of $100,000 cars in my personal stable. But for a good many guys, $100,000 is about ten minutes' work at their CEO job or a good day in their stock portfolio (on which they're only paying 15% taxes so it's insanely profitable, but I digress). I work with a few of these guys and there was a good example on the Barrett-Jackson coverage, maybe you saw him. It was the older guy who was letting his two young grandchildren (I assume) bid on cars. Both kids were under 10. The little girl bid a VW Beetle to $28,000 and the little boy bought something equally harmless for an equally surprising number. I think grandpa was out close to $60,000 when it was done, and they were all laughing and having fun. Good for them, they're going to have fun in old cars and obviously, $60,000 to that gentleman is like a $100 family meal to the rest of us. Adjust your ideas of what wealth really is, because this is how it looks.

Then there are the guys who have a fixed amount of money, but they're going to buy a car--something, anything--just because they want to get into the game. An auction puts a huge buffet of styles, eras, colors, and quality in front of them, all ready to go instantly, and they bid on those cars they like until they win. Say you have $50,000 in home equity to spend. You bid on cars you like until you win one and have a lot of fun doing it. These guys have the money to spend, they're going to spend it. They're not necessarily intending on spending all of it, they're not being reckless, but they're PREPARED to spend it all and they'll over-pay a bit just to get it done. I don't feel that these guys enjoy the hunt, although they do like the thrill of bidding. They're not scrolling through the pages of Hemmings looking for a bargain or just the right car at just the right price, they show up to buy and get instant gratification from an auction, even if it costs them 10-20% more than it otherwise would. And that's perfectly OK. The auctions make it especially easy because they package everything in one place and you pay your money and a few days later, a car shows up at your door. Nice and neat, which is what these guys like.

There are also buyers who go for something specific. There are some cars that are rare or special and you have to buy them when the opportunity presents itself. If you have a hole in your Ferrari collection shaped like a 250 GTO, well, there are only 36 of them, and when one comes to auction, you move to buy it, cost be damned. These guys are also type 1 guys with essentially limitless funds, but it happens at lower levels, too. Some cars are must-haves for some buyers and they'll pay a premium to have it because it might be their only/best chance to own it. On quality cars, a few extra bucks on the front end will usually make itself up in time on the back end.

Then there are guys like me who are mercenaries. When I go to buy, I go with profit in mind. You make your money when you buy a car, not when you sell it. I pre-identify my candidates, inspect them carefully, bid to my pre-established maximum, then get out. I'm not who you see on TV, and I lose more often than I win. But sometimes I get a bargain.

Auction fever is real, free alcohol and pretty ladies will inflate certain egos, but nobody's doing anything truly stupid (from their own perspective) at auctions. Their motivations and limitations are simply different than yours.

A thorough analysis, Matt! Thanks for writing.

Long-term capital gains taxes on investments (rental real estate, stocks, etc.),

are 20% (not 15%) in the USA for CEOs, actors, teachers,

librarians, construction workers--all of whom are investors--because:

(1) They are not indexed for inflation. You sell an item after

many years for a profit, though you may actually have LOST

money after inflation, yet you still pay 20% of the "gain" ;

(2) Capital losses are greatly limited: Your net capital loss is

capped at $3000 per year. Lose $30,000 in the stock market

during the Great Recession? You could be deducting that over 10 years!

(3) To encourage LONG-term investment that lets businesses grow--

not simply speculation and flipping. That's why short-term capital gains

are taxed at ordinary income rates, while patience is rewarded.

But I understand that collectibles such as cars aren't considered investments

(regrettably!) and their gains are taxed at ordinary income rates.

This is just to clarify the point. Now back to auction discussion!

Great post, Matt. Thanks.

My late Uncle's auction contained lots of high end pieces. Cars and lots of other things. He had restored a couple Cushman scoters. So happened two Grand dads where there, they didn't know each other, and strangly each had with them two young grand sons. Well for the first day the boys hung around the scoters, and it was apparent they had their grandpa's convinced they should own the two scoters.

Well when they came on the block the two grand dads got in a bidding war. Scoters that were estimated to sell for around $2,500.00 each sold for over $6,000.00 each. Two grand kids went home very sad, and everyone at the auction was shaking their heads.

Lots of money can do funny things.

Dale in Indy

As Matt said above, there are more than a few well heeled collectors who play with antique cars and for whom it is truly a hobby. I can tell you about an acquaintance of mine who has owned at least 200 collector cars over the years, probably far more. For him antique cars are a hobby that fortunately he can indulge without thinking too much about the cost. He shies away from publicity and just enjoys the hobby. He claims to have only once made a profit on a car and that was purely by accident and I'm sure he is being truthful. There are cars he has bought and sold several times as his tastes evolved, losing money each time. He has had cars restored, played with them a bit, then sold them at a huge loss. The point is, don't assume that all those "high rollers" are into cars to feed their egos or to turn a profit. There are in this world those who just enjoy old cars the same as you and I but who can play without worrying about the cost.

As Matt said above, there are more than a few well heeled collectors who play with antique cars and for whom it is truly a hobby. I can tell you about an acquaintance of mine who has owned at least 200 collector cars over the years, probably far more. For him antique cars are a hobby that fortunately he can indulge without thinking too much about the cost. He shies away from publicity and just enjoys the hobby. He claims to have only once made a profit on a car and that was purely by accident and I'm sure he is being truthful. There are cars he has bought and sold several times as his tastes evolved, losing money each time. He has had cars restored, played with them a bit, then sold them at a huge loss. The point is, don't assume that all those "high rollers" are into cars to feed their egos or to turn a profit. There are in this world those who just enjoy old cars the same as you and I but who can play without worrying about the cost.

I must be this guy. Not that well healed but always seem to take the loss.

I have a lot of fun doing it and that is what is important to me.

I play with old cars. My wife plays poker and visits casinos. I guess that we're both a couple of losers.

http://www.furrow.com/event/antique-car-collection-estate-sen-howard-baker/

car collection of the late Sen. Howard Baker.

That would good next to a Kaiser....

Don't be too quick to criticize BJ. If you go the first 2 days you will undoubtedly find a good buy. I did not suggest that all cars are low priced are low but there are bargains to be had. I have bought cars on the first day at BJ and sold them in the parking lot the next day for double. Money people arrives on the weekend and prices skyrocket. Wayne

I attended the BJ auction in 2003 when Don Johnson's ( movie star ) 1949 Ford pickup truck sold for $14,020 dollars and it was totally restored. The truck was a gift from his movie star wife and the restoration costs were over $90,000 dollars. it was a bad time for me to be out in the parking lot. Wayne

In the case of the Roger Baillon Auction just concluded, no.

Yahoo! Autos writer Justin Hyde just posted an article 2 hours ago about the 1949 Talbot Lago T26 Grand Sport Short Wheel Base by Saoutchik. It fetched $1,900,000. The little Ferrari 250 GT managed $18,500,000. I get that all of the cars were in bad shape except the Ferrari, but what's bad is the view of the l.s. of the Talbot Lago. It looks like it was side-swiped by a train...a very rusty train. I'll admit the car was originally a stunning exercise in design.

In the case of the Roger Baillon Auction just concluded, no.

Yahoo! Autos writer Justin Hyde just posted an article 2 hours ago about the 1949 Talbot Lago T26 Grand Sport Short Wheel Base by Saoutchik. It fetched $1,900,000. The little Ferrari 250 GT managed $18,500,000. I get that all of the cars were in bad shape except the Ferrari, but what's bad is the view of the l.s. of the Talbot Lago. It looks like it was side-swiped by a train...a very rusty train. I'll admit the car was originally a stunning exercise in design.

Even at $1.9 million, that Talbot was likely a decent buy. He'll spend another $1 million restoring it (any car can be restored to Pebble Beach standards for $1 million) and then it'll go and collect all kinds of major awards and will probably be worth $5-6 million when it's all done. Like I said, the guys with insanely deep pockets play at a different level, but this is one case where a $1.9 million rust bucket could probably be considered a reasonable investment.

On the other hand, that neat little 1939 Panhard et Levassor Dynamic, which was equally wasted, sold for just over $15,000. It, too, will be an expensive restoration, but it's a worthy car that is much more attainable by mere mortals. If it had bid to $50,000 or beyond, we'd know that the hobby has well and truly gone insane, but the prices at that auction of "Barn Find" exotica had surprisingly sane prices.