KevinVal

What's your opinion of car auctions?

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8 hours ago, John348 said:

Some of the auction houses will buy the car if the price is low and either sell it at or another auction or at one their dealerships, I know of two instances of this happening. The seller was told a number they thought the car would sell at, highest bidder was way less, and the car was for sale on their website later that week. While true they were the highest bidder, just seems a little unethical to me. 

 

 It is unethical and in some states it's illegal.

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2 hours ago, JV Puleo said:

 It is unethical and in some states it's illegal.

Both times were in the state of Connecticut 

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I think that the key to auction success is in doing your homework, and knowing what you want.  Cars are auctioned every week in every state.  It is how the car business runs.  Just because a particular car has more value to the buyer than to the seller doesn't mean that one or the other is being cheated.  It is capitalism in action; supply and demand.  You can talk about fairness, legality, and so forth,, but at the end of the day, nobody is going to force you to buy something you don't want to buy, and nobody is going to give you a guarantee on a car that is twenty five to a hundred years old, no matter where you buy it.

If you go to an auction with a pocket full of money not knowing what you want nor how much it it worth, then have a couple of drinks to boot, you may come home with a trailer full of regrets.  On the other hand, if you have studied the auction catalog in advance, know the characteristics and value(s) of the car(s) you want to pursue, and give each a close look before bidding, you may come home with a bargain.

if you have never been, you could go to a couple as an observer, maybe even "game" a couple of cars, before you attend one as a registered bidder with money in hand.

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Along the lines as to what John was saying was an article I read on car auctions. The auctioneer will start out by pointing and saying "I have $10,000, now I have 20, now 30" and no one is actually bidding. All he is doing is pumping up the sale, they are called "chandelier bids" because that's what the auctioneer is pointing to. When I was at Barrett Jackson, I was close enough to hear an exchange between a "ringman" and a potential buyer. When the bidder backed off and told the ringman he was done, the ringman turned to the lady the bidder was with and said, "whats with this cheapskate, does he take you out to eat at McDonalds". Totally insulting, I don't know how I would have reacted.

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In most states it is perfectly legal for the auctioneer to accept chandelier bids up to the reserve amount. You can often tell when the auctioneer literally begs for another bid that the chandelier is high bidder at the reserve price and he wants just one real bid to sell the car.

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I have been to the Mecum Dallas auction four times with various car buddies. It fills the entire convention center with at least 1000 cars and is a very fun air conditioned car show, they specialize in muscle cars and you see a lot of rare ones. The third time I went I paid for a bidders number and seriously considered a few cars, to the point of opening hoods, getting inside and crawling under which is allowed and encouraged. The main car I was interested in was gorgeous inside and out but when I crawled under I saw disasters waiting to happen and would not have driven that car a block. In the end I made no bids, if I want to take a risk I can buy a car on Ebay and spend a lot less money.

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Chandelier bidding (I've also heard it called 'bidding against the wall' ) We were looking for a car for our son several years ago and went to a municipal auction.   One car in particular caught our eye and my wife attempted to bid on it.  The auctioneer ignored her and took 'bids' from the far corner of the room until the price magically rose by $500.00.  Then he pointed to her for a bid at the inflated price and she said no.   The rules at this auction were that an immediate deposit was required from the high bidder.  Amazingly enough, that didn't happen and the car was re-run about 1/2 hour later.  The selling price at that point was significantly lower.....I think it was Karma at work.

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On 7/14/2019 at 9:17 AM, John348 said:

Some of the auction houses will buy the car if the price is low and either sell it at or another auction or at one their dealerships, I know of two instances of this happening. The seller was told a number they thought the car would sell at, highest bidder was way less, and the car was for sale on their website later that week. While true they were the highest bidder, just seems a little unethical to me. 

 

I’ve been told Barrett Jackson does this all the time, for many different reasons.

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I had a good friend, B.B. Crump, in Baton Rouge who bought a lot of Classics at auction.  He ended up with about 50 Full Classics in a beautiful building.  His collection was Cord, Duesenberg, Ruxton, Stutz, that kind of stuff. He's gone now, but I'll describe his method.

 

He would go to an auction and look at the cars he wanted.  In his notebook, he'd note any evident flaws and the estimated cost to fix them.  He knew that there might be mechanical issues, so he adjusted for that.  After all that, he wrote a number in his notebook for that car.   

 

That number was NEVER exceeded when he bid.  I sat next to him once when a car sold for a few hundred dollars over his high number.  He said no.

 

He went to a LOT of auctions, but he came away with a so called bargain at a number of them.  There always seems to be a car or three that get underbid and the seller wants out, and he picked those up and did well.

 

The key at an auction, as mentioned, is don't get caught up in "he's not going to outbid me for gosh sake".  Figure a number you're comfortable with, and stay there regardless of pressure from auctioneer assistants, whiskey, or wife/girlfriend.   Well, maybe listen to your wife if she's for buying a car!!

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1 hour ago, 39BuickEight said:

I’ve been told Barrett Jackson does this all the time, for many different reasons.

 

I did not want to mention names, how else would they boast 99% sales and no reserve?  I think a lot of the TV is theater. I specifically remember a televised auction where a Chevrolet K/5 Blazer is auctioned and sold for some ridiculous amount, and the talking heads go on to mention "that's one of several K/5 Blazers on the block this week, looks like they are hot and only going to go up in value." So my first questions are, dose the auction house own that Blazer? Did it really sell? Were they priming the pump for the other ones that they own when they cross the block? The more I look at it the more I think it stinks...  

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1 minute ago, John348 said:

 

I did not want to mention names, how else would they boast 99% sales and no reserve?  

 

Well, no reserve pretty much guarantees the car will sell, even if there's only one bid. You can get one bid on any car. 

 

It is, however, interesting to watch where some of the cars at an RM auction end up when they don't sell...

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Everyone can have an opinion.  I have been to every Barrett Jackson Scottsdale auction since the second one.  I have sold cars there and have never had a bad experience.  I look forward to selling more.  Remember if you want to be successful the car you consign must be in perfect condition.  The buyers are not people getting cars to repair something or fix up.  Yes your first day auction cars can leave a lot to be desired but some of these can be great deals for small fixer uppers.   Some people will not consign because of "No Reserve".  That problem comes from the fact that many people thing there vehicle is worth twice of what it really is because of the money they spent or spend too much time on Google.

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Like most things in life things are not always fair.   Each auction company is different and consignors and buyers are treated differently depending on how much they buy or sell.   Much like any other business.  A newbie on either side of the coin can expect the same outcome as you would in any other aspect of life when you don't know what you are doing.

 

Btw,  chandelier bidding is simply getting the car to the reserve.  I can't imagine an auction company taking the chance of having a phantom bid trump a real once once they are in the money.   And yes,  you can almost always tell from the cadence when the bidding becomes real.

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3 hours ago, trimacar said:

I had a good friend, B.B. Crump, in Baton Rouge who bought a lot of Classics at auction.  He ended up with about 50 Full Classics in a beautiful building.  His collection was Cord, Duesenberg, Ruxton, Stutz, that kind of stuff. He's gone now, but I'll describe his method.

 

He would go to an auction and look at the cars he wanted.  In his notebook, he'd note any evident flaws and the estimated cost to fix them.  He knew that there might be mechanical issues, so he adjusted for that.  After all that, he wrote a number in his notebook for that car.   

 

That number was NEVER exceeded when he bid.  I sat next to him once when a car sold for a few hundred dollars over his high number.  He said no.

 

He went to a LOT of auctions, but he came away with a so called bargain at a number of them.  There always seems to be a car or three that get underbid and the seller wants out, and he picked those up and did well.

 

The key at an auction, as mentioned, is don't get caught up in "he's not going to outbid me for gosh sake".  Figure a number you're comfortable with, and stay there regardless of pressure from auctioneer assistants, whiskey, or wife/girlfriend.   Well, maybe listen to your wife if she's for buying a car!!

 

That's the way to do it.

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Posted (edited)
3 hours ago, 5632 said:

Everyone can have an opinion.  I have been to every Barrett Jackson Scottsdale auction since the second one.  I have sold cars there and have never had a bad experience.  I look forward to selling more.  Remember if you want to be successful the car you consign must be in perfect condition.  The buyers are not people getting cars to repair something or fix up.  Yes your first day auction cars can leave a lot to be desired but some of these can be great deals for small fixer uppers.   Some people will not consign because of "No Reserve".  That problem comes from the fact that many people thing there vehicle is worth twice of what it really is because of the money they spent or spend too much time on Google.

 

I am glad to hear that you had a great experience.  As a seller don't they discuss with you what they think the car will sell for prior to being in the catalog? Both of my friends said they did review the catalog price, so I don't know how anyone would be expecting twice the value, unless they were told by the auction house? It turned out in both cases the house told them double of what the car went for. One of the cars I feel sold for the right price, the other no, it was a recent AACA Senior Grand National Car and National Award Winner, and a desirable car  

Edited by John348 (see edit history)

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3 hours ago, autoluke said:

Only one repeat winner at any  auction:     The House.

I have never lost and I am not the house.

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Yes but the house makes out every time.  Even when you win once in a while. 

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I was a worker at several well-known auctions in the '70s and '80s and have seen the dirty underbelly of the auction world. That's not to say there are no quality auctions, because there are. If I were in a position to buy or sell collectors cars at auctions, there are only a select few auction companies I would patronize.

 

In my opinion, a lot of really good and desirable cars never see an auction block, although there are many that do, especially at the high end of values.

 

And, as the man said, the house always gets its share if a car sells; it never loses.

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I don't think there is any mystery to any of it.    As a seller,  using an auction company will cost you approx 15% of the gross.   Countering that is the potential to have a higher sale price than if you were selling privately because of the marketing, exposure and "auction fever".   If you don't want to auction it, you can use a dealer which will be closer to 7% of the gross, also with the potential for a higher sales price.   Or finally, sell it on your own.   For the most part,  the latter will almost always realize a lower price for a variety of reasons.  The biggest ones being most people are horrible at selling cars.

 

As a buyer,  there are some reasons to buy at auction.   Biggest one being access to cars that are not usually available,  or being able to see and touch a bunch of stuff in one place.   Also,  with the higher end houses like Gooding and RM there is a certain amount of vetting going on.   They don't want deals to unravel after the fact because of misrepresentation.   So there is a little more protection for the buyer.   If I was buying a 65 straight six mustang coupe,  I can't think of any reason I should buy it at auction.

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11 hours ago, gwells said:

I was a worker at several well-known auctions in the '70s and '80s and have seen the dirty underbelly of the auction world.

...there are only a select few auction companies I would patronize.

 

Can you tell us the ones that, in your experience, are preferable?  It never hurts to give a good company some exposure.

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I have seen some average car owners get roped into listing their cars for auction. The instances have been sad. If I had offered them the amount they ended up with they would have been insulted.

 

I have been to a few auctions. Bidders are generally sectioned off into their own area. Too many dealers or "regulars My observation was two dealers working together to pull a rube into the bidding. If they didn't get him the car showed up at the next auction.

 

Detailing the passenger side is a telling comment. One year at Hershey we noticed a group of GM A body cars cross the block. The two door hardtops were displayed with doors open, pillared two door sedans had the doors left closed and looked like hardtops.

 

Over the years I have asked on the Forum if anyone has bought or sold at auction and how the experience was. Few if any have made specific replies.

 

I would never auction a personal car. I know how much I want and it would be very hard to believe my estimate would be exceeded. The few times I have been tempted by an auction "bargain" I have passed and one one else wanted the dog either.   !! I did buy one old lizard, brought it home, and told my wife I bought it for her. She said it was ugly. It was so bad I only made $400 or $500 on it.

 

The best advice is to be more methodical. Decide what you want and join the marque club. Look for an aging member who has the car you like and uses it a lot. Go to cruises nights and watch for cars that appear every week. Ask if they are for sale.

 

Don't worry about Fat Cats. Most of them are attending on a blank line of credit. If the cash swipe machine quit working you might be the only one in the place that pull out a $5 for a cold drink (been there done that).

 

Don't get sucked in, leave your money at home.

 

 

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On 7/14/2019 at 8:39 PM, John348 said:

Both times were in the state of Connecticut 

 

If it is the auction I'm thinking of it is held on Native American land, surrounded by the state of Connecticut.

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Any more I consider car auctions to be entertainment best seen on TV mostly at 3X.

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