Is the bubble about to burst?
Discussion
This is called market manipulating and if this happened in the financial industry people would go to jail. Unless you are very experienced and can look after yourself never buy at an auction. Even reputed auction houses will do anything to get away with it - and i know it as i have been burned.
Robbo66 said:
Cheib said:
Auction houses compete for consignments, for big tickets they won't get all the commission. A couple of the things they'll do.
1. The seller either can get a reduced fee or if it's a particularly desirable car they pay no fee at all and actually get some of the buyers commission. i.e. Car sells for £1mil with in theory buyer and seller both paying 10%. What actually happens is that the seller pockets £1,050,000 and the auction house gets £50k.
2. Auction houses also underwrite consignments. They use to do it themselves but in 2008 it nearly put them out of business. Now they'll approach a third party to underwrite the item ( normally a collector who is keen not to see an item sell cheaply). So in the above example where a car sells for £1mil the underwriter say underwrote the car at £900k and in return will get a decent chunk of the commission that the auction house receives.
The above is not going to happen for a £100k car but it will definitely happen for the headline grabbing cars or collections like the Porsche one at the RM sale.
They also sometimes get buyers dropping out on them and generally will find someone else to buy it and wear the loss (if need be).
I have t say when my mate who told me about things like the underwriting when cars are shown as "no reserve" I was quite surprised. If a banker did that it would be career over!
Again, shows why I and many others I know, would never buy from Auction houses. The cream will go to the specialists for that marque, Fiskins/ Talacrest for Ferrari, Maxted for PORSCHE for example.1. The seller either can get a reduced fee or if it's a particularly desirable car they pay no fee at all and actually get some of the buyers commission. i.e. Car sells for £1mil with in theory buyer and seller both paying 10%. What actually happens is that the seller pockets £1,050,000 and the auction house gets £50k.
2. Auction houses also underwrite consignments. They use to do it themselves but in 2008 it nearly put them out of business. Now they'll approach a third party to underwrite the item ( normally a collector who is keen not to see an item sell cheaply). So in the above example where a car sells for £1mil the underwriter say underwrote the car at £900k and in return will get a decent chunk of the commission that the auction house receives.
The above is not going to happen for a £100k car but it will definitely happen for the headline grabbing cars or collections like the Porsche one at the RM sale.
They also sometimes get buyers dropping out on them and generally will find someone else to buy it and wear the loss (if need be).
I have t say when my mate who told me about things like the underwriting when cars are shown as "no reserve" I was quite surprised. If a banker did that it would be career over!
The odd one will turn up at the likes of Hexagon, who prey on the fickle, but also charge ridiculous commission rates. A fool and his money etc...
It's harder to control the market with cars as there are so many more people involved and so many more cars. but if a major piece of art goes to auction its a VERY controlled process. There are too many people with vested interests that want to make sure nothing sells cheaply. Indeed they sometimes conspire to make sure things get big prices. Damien Hirst's diamond encrusted skull was "sold" to a syndicate of people that owned a lot of his work already including Hirst i.e. it was never really sold. Hirst sold a share in it to some people who already owned his work. Chances are the amount of money that changed hands was a tiny % of the reported $100mil sale price. All the work they already owned is suddenly worth a lot more because one "halo" items sells for huge money....
Its f
king incredible that its allowed to go on and that its listed companies that are facilitating it.Budflicker said:
Somewhat similar to the adverts that dealers constantly put up on Pistonheads for cars saying sold, in order to somehow give the impression that the other cars they have at similar prices are worth the amount.
Skullduggery I tell ya!!!
This has been happening for a while. Skullduggery I tell ya!!!
I can think of a grey 997 gt3 which has been market sold for around a year. At the time it was well over priced, they were asking 100k for a comfort spec which had tacky aftermarket modifications. My guess is this car never sold and the owner had it back.
The same is happening with gt4 cars being advertised at £110k with poor specs, there is also the long standing LHD green 997 gt3 RS at £200k!
gbrown2014 said:
Just looking at the rm sale tonight, lots of lhd examples. I was wondering are people importing their cars into the UK because they will fetch a higher return than on the continent?
the ex-japan 4.0 rs at silverstone had me wondering this too
Exactly the same is happening with a few other marques; 'Classic' shape Range Rovers, for example.the ex-japan 4.0 rs at silverstone had me wondering this too
gbrown2014 said:
Just looking at the rm sale tonight, lots of lhd examples. I was wondering are people importing their cars into the UK because they will fetch a higher return than on the continent?
the ex-japan 4.0 rs at silverstone had me wondering this too
Britain has more wealth per head than other EU countries, except Switzerland, which is a smaller market anyway.the ex-japan 4.0 rs at silverstone had me wondering this too
sparta6 said:
Britain has more wealth per head than other EU countries, except Switzerland, which is a smaller market anyway.
I think it is more a question of the UK auction houses having a larger reach outside the UK so you will see Sothebys and others sourcing in such places as Japan, Dubai etc. Also London is far more cosmopolitan than other capitals so you will have a much larger audience of foreign buyers. Currency is also a factor with the pound having fallen against the Euro, Continental buyers are looking for bargains. I wouldn't trust the auction houses as far as I could throw them-
A high end watch auction house once put a couple of 'ultra rare' vintage military watches with Rolex movements up for sale in an auction-
one of the worlds leading Rolex experts said without any doubt that they were not original but still I believe the auction house sold them......you'd think buying from a leading auction house you'd expect some guarantee of originality but this is not the case- they all put the dollars first.
A high end watch auction house once put a couple of 'ultra rare' vintage military watches with Rolex movements up for sale in an auction-
one of the worlds leading Rolex experts said without any doubt that they were not original but still I believe the auction house sold them......you'd think buying from a leading auction house you'd expect some guarantee of originality but this is not the case- they all put the dollars first.
Sotherby's live.. https://www.youtube.com/watch?v=elK2mLfvaU0
The bubble sure ain't bursting at the high end of the air cooled market.......
993 RS CS est £220-260 .....Sold for £403k
993 GT2 est £750-850 ......Sold for £1.85m, yes you read that correctly, £1.85m....
993 Turbo S est £200-240 ....Sold for £320k
964 RS 3.8 est £400-500 ....Sold for £717k....
964 Turbo S est £210-250 ....Sold for £974k.....
993 RS CS est £220-260 .....Sold for £403k
993 GT2 est £750-850 ......Sold for £1.85m, yes you read that correctly, £1.85m....
993 Turbo S est £200-240 ....Sold for £320k
964 RS 3.8 est £400-500 ....Sold for £717k....
964 Turbo S est £210-250 ....Sold for £974k.....
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