1,000 Mile F1 being Auctioned - How Much?
Discussion
Maybe a bit controversial but i'll say it anyway, and bear in mind that I wasn't at the auction and so didn't see how the proceedings went, but............
An auctioneer is well within his rights to take phantom bids at BELOW the car's reserve, and reserve is often BUT NOT ALWAYS the lower of the estimate range.
So IF the reserve was $12M, the $10.75M 'bid' MIGHT have been fictitious, as with commission it would have been $11.825 and hence less than the reserve.
Now if there had been another bid it would in all probability have been $11M (as I said, I wasn't there and didn't see the bidding increments but in my experience it is likely to have been $11M) then with commission added the price would be $12.1M which would have been over the reserve.
............ a lot of IF's and assumptions I know, but in my mind the best bid may well have been south of the claimed $10.75M
An auctioneer is well within his rights to take phantom bids at BELOW the car's reserve, and reserve is often BUT NOT ALWAYS the lower of the estimate range.
So IF the reserve was $12M, the $10.75M 'bid' MIGHT have been fictitious, as with commission it would have been $11.825 and hence less than the reserve.
Now if there had been another bid it would in all probability have been $11M (as I said, I wasn't there and didn't see the bidding increments but in my experience it is likely to have been $11M) then with commission added the price would be $12.1M which would have been over the reserve.
............ a lot of IF's and assumptions I know, but in my mind the best bid may well have been south of the claimed $10.75M
100 IAN said:
Maybe a bit controversial but i'll say it anyway, and bear in mind that I wasn't at the auction and so didn't see how the proceedings went, but............
An auctioneer is well within his rights to take phantom bids at BELOW the car's reserve, and reserve is often BUT NOT ALWAYS the lower of the estimate range.
So IF the reserve was $12M, the $10.75M 'bid' MIGHT have been fictitious, as with commission it would have been $11.825 and hence less than the reserve.
Now if there had been another bid it would in all probability have been $11M (as I said, I wasn't there and didn't see the bidding increments but in my experience it is likely to have been $11M) then with commission added the price would be $12.1M which would have been over the reserve.
............ a lot of IF's and assumptions I know, but in my mind the best bid may well have been south of the claimed $10.75M
Reserve doesn't include commission.An auctioneer is well within his rights to take phantom bids at BELOW the car's reserve, and reserve is often BUT NOT ALWAYS the lower of the estimate range.
So IF the reserve was $12M, the $10.75M 'bid' MIGHT have been fictitious, as with commission it would have been $11.825 and hence less than the reserve.
Now if there had been another bid it would in all probability have been $11M (as I said, I wasn't there and didn't see the bidding increments but in my experience it is likely to have been $11M) then with commission added the price would be $12.1M which would have been over the reserve.
............ a lot of IF's and assumptions I know, but in my mind the best bid may well have been south of the claimed $10.75M
Justayellowbadge said:
Reserve doesn't include commission.
Technically true but auction houses will in most cases waive part of their commission to ensure car sells.If it doesn't sell they make nothing and it looks bad that the car didn't sell.
If they 'hypothetically' waived part of their commission in this example the car would have sold, the auction house would have made commission from the seller + the $100,000 over the $12M reserve.
NB. At that level its likely that the seller had agreed better terms such as they received the buyer's commission, in which case the auction house would 'only' have made $100,000 and the benefit of the car selling, which would have been a feather in their cap.
Having now failed to sell the car won't be something they'd be proud of. When trying to secure cars for future auctions the % of cars they've sold is a major thing they bang on about. I don't expect the next F1 at auction to be entrusted to them, but if this one had sold then it quite likely could have been.
You need to trust me on this one, I've bought and sold at auction at less than reserve with two different auction houses doing exactly this.
Neither buyer or seller is disadvantaged and whilst the auction house doesn't make quite as much as they would have liked to they take the view that making something rather than nothing and getting a car sold is best for them and the buyer & seller.
They call it "taking bids off the wall" and as far as I'm concerned it should be banned. No different than shill bidding (using a fake account or your mates to bump up the price ) on eBay......
As far as taking false bids below the reserve, well who sets the the reserve!
As far as taking false bids below the reserve, well who sets the the reserve!
Edited by mike01606 on Monday 18th August 13:49
Adam B said:
So theoretically they may have been no proper bids at all?
I still find it odd that phantom bids by the auctioneer is an acceptable practice - does it happy in all types if auction eg selling property or antiques? Is the practice clearly stated to newbies?
I've had experience of car and property auctions and it happens in both.I still find it odd that phantom bids by the auctioneer is an acceptable practice - does it happy in all types if auction eg selling property or antiques? Is the practice clearly stated to newbies?
It is not made clear to newbies (or anyone else for that matter) but over time attending auctions you begin to see certain occurances in the same way you learn certain phrases [and their meaning] or actions
100 IAN said:
Justayellowbadge said:
Reserve doesn't include commission.
Technically true but auction houses will in most cases waive part of their commission to ensure car sells.If it doesn't sell they make nothing and it looks bad that the car didn't sell.
If they 'hypothetically' waived part of their commission in this example the car would have sold, the auction house would have made commission from the seller + the $100,000 over the $12M reserve.
NB. At that level its likely that the seller had agreed better terms such as they received the buyer's commission, in which case the auction house would 'only' have made $100,000 and the benefit of the car selling, which would have been a feather in their cap.
Having now failed to sell the car won't be something they'd be proud of. When trying to secure cars for future auctions the % of cars they've sold is a major thing they bang on about. I don't expect the next F1 at auction to be entrusted to them, but if this one had sold then it quite likely could have been.
You need to trust me on this one, I've bought and sold at auction at less than reserve with two different auction houses doing exactly this.
Neither buyer or seller is disadvantaged and whilst the auction house doesn't make quite as much as they would have liked to they take the view that making something rather than nothing and getting a car sold is best for them and the buyer & seller.
Also when you see something seriously expensive at auction without a reserve it's almost always been underwritten. The auction houses themselves used to do this but got very,very badly burnt in 2008/9. Now a third party underwrites it who generally is interested in making sure that the piece of art/car doesn't sell too cheaply....for most artists for example there are generally four or five collectors who own sufficient works of art that they effectively act as a cartel to make sure nothing sells cheaply. Same with expensive Ferrari's! The underwriter gets paid a fee and often a % of the price achieved above that.
Adam B said:
So theoretically they may have been no proper bids at all?
I still find it odd that phantom bids by the auctioneer is an acceptable practice - does it happy in all types if auction eg selling property or antiques? Is the practice clearly stated to newbies?
Does it really matter if the bids are real or phantom if there is a reserve, below which you couldn't buy the car anyway?I still find it odd that phantom bids by the auctioneer is an acceptable practice - does it happy in all types if auction eg selling property or antiques? Is the practice clearly stated to newbies?
I've been to many auctions and it's interesting to see the way people bid, including some who just like the attention and stick their hand up knowing that they aren't going to buy the item.
Obviously the best tactic is to wait right until the end and, if the car is still at a level you want to pay, put your hand up at the last moment before the lot is passed or sold.
will_ said:
Does it really matter if the bids are real or phantom if there is a reserve, below which you couldn't buy the car anyway?
I've been to many auctions and it's interesting to see the way people bid, including some who just like the attention and stick their hand up knowing that they aren't going to buy the item.
Obviously the best tactic is to wait right until the end and, if the car is still at a level you want to pay, put your hand up at the last moment before the lot is passed or sold.
Presume phantom bids can only go up as far as the reserve?I've been to many auctions and it's interesting to see the way people bid, including some who just like the attention and stick their hand up knowing that they aren't going to buy the item.
Obviously the best tactic is to wait right until the end and, if the car is still at a level you want to pay, put your hand up at the last moment before the lot is passed or sold.
Adam B said:
will_ said:
Does it really matter if the bids are real or phantom if there is a reserve, below which you couldn't buy the car anyway?
I've been to many auctions and it's interesting to see the way people bid, including some who just like the attention and stick their hand up knowing that they aren't going to buy the item.
Obviously the best tactic is to wait right until the end and, if the car is still at a level you want to pay, put your hand up at the last moment before the lot is passed or sold.
Presume phantom bids can only go up as far as the reserve?I've been to many auctions and it's interesting to see the way people bid, including some who just like the attention and stick their hand up knowing that they aren't going to buy the item.
Obviously the best tactic is to wait right until the end and, if the car is still at a level you want to pay, put your hand up at the last moment before the lot is passed or sold.
One of the reasons people buy these high value cars at auction is that they like to know there is an under bidder and that they are competing against a real person and not auction room games.
Also they auction houses are still charging 10% buyers premium which hasn't changed in a long time but the prices have increased hugely. $1,100,000 buyers premium is a huge amount of money for sticking a tent up for a week!!
They could have done a deal if they had offered it via private treaty but it was more important to put it under the hammer for PR reasons.
The market is around $10m to $12m but for an EU buyer interested in a US car he will pay 20% duty bringing it back. In the case of the white car that would have been 30% in total inc the BP.
Also they auction houses are still charging 10% buyers premium which hasn't changed in a long time but the prices have increased hugely. $1,100,000 buyers premium is a huge amount of money for sticking a tent up for a week!!
They could have done a deal if they had offered it via private treaty but it was more important to put it under the hammer for PR reasons.
The market is around $10m to $12m but for an EU buyer interested in a US car he will pay 20% duty bringing it back. In the case of the white car that would have been 30% in total inc the BP.
InsideDealings said:
One of the reasons people buy these high value cars at auction is that they like to know there is an under bidder and that they are competing against a real person and not auction room games.
Also they auction houses are still charging 10% buyers premium which hasn't changed in a long time but the prices have increased hugely. $1,100,000 buyers premium is a huge amount of money for sticking a tent up for a week!!
They could have done a deal if they had offered it via private treaty but it was more important to put it under the hammer for PR reasons.
The market is around $10m to $12m but for an EU buyer interested in a US car he will pay 20% duty bringing it back. In the case of the white car that would have been 30% in total inc the BP.
Interesting, thanks for the reply.Also they auction houses are still charging 10% buyers premium which hasn't changed in a long time but the prices have increased hugely. $1,100,000 buyers premium is a huge amount of money for sticking a tent up for a week!!
They could have done a deal if they had offered it via private treaty but it was more important to put it under the hammer for PR reasons.
The market is around $10m to $12m but for an EU buyer interested in a US car he will pay 20% duty bringing it back. In the case of the white car that would have been 30% in total inc the BP.
InsideDealings said:
One of the reasons people buy these high value cars at auction is that they like to know there is an under bidder and that they are competing against a real person and not auction room games.
Of course they're not competing for anything until the reserve has been reached. InsideDealings said:
Also they auction houses are still charging 10% buyers premium which hasn't changed in a long time but the prices have increased hugely. $1,100,000 buyers premium is a huge amount of money for sticking a tent up for a week!!
Whilst I would tend to agree that a 25% total commission paid to an auction house is on the high side, I am sure you appreciate that the costs of running an auction are much more than putting a tent up.Estate agents haven't really changed their fees either, even though the value of the properties they are selling has increased. Obviously when the values fall, auction house incomes also fall.
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