Why do people sell cars at auction?
Discussion
Ok, I can only assume this is a stupid question, but I just don’t get it, so perhaps someone can enlighten me.
Today I was at the London Classic Car Show and was watching the COYS auction. Each car there (some lovely stuff on the face of it) had an estimate well below their market value “norm”, and then for the most part each car went for well below its estimate. For example a Ferrari 599, very few of which are listed on here for less than £100k, went for £60k. A brilliant looking low mileage Diablo also went for £100k when the cheapest here is £130k.
Why would the seller do such a thing? Assuming it doesn’t have some fatal flaw (in which case why buy), a dealer would take that off your hands for better if you were so desperate to get rid of it.
What am I missing? I’m guessing there is a simple answer...
Cheers all.
Today I was at the London Classic Car Show and was watching the COYS auction. Each car there (some lovely stuff on the face of it) had an estimate well below their market value “norm”, and then for the most part each car went for well below its estimate. For example a Ferrari 599, very few of which are listed on here for less than £100k, went for £60k. A brilliant looking low mileage Diablo also went for £100k when the cheapest here is £130k.
Why would the seller do such a thing? Assuming it doesn’t have some fatal flaw (in which case why buy), a dealer would take that off your hands for better if you were so desperate to get rid of it.
What am I missing? I’m guessing there is a simple answer...
Cheers all.
So said:
Auctions tend to amplify the market in which they operate. Maybe that is what happened here.
There will be a buyer's premium to pay, which I am presuming you aren't including in your figures. It won't make up the balance, but will reduce the difference.
Auctions are a guaranteed sale on the fall of a hammer. It could be a creditor liquidating someone's portfolio and there may be recourse for any loss - so they may not care.
Some good points there thanks.There will be a buyer's premium to pay, which I am presuming you aren't including in your figures. It won't make up the balance, but will reduce the difference.
Auctions are a guaranteed sale on the fall of a hammer. It could be a creditor liquidating someone's portfolio and there may be recourse for any loss - so they may not care.
Excluding the final one re liquidation the logic still seems odd to me, because as a buyer, not knowing the full state of the vehicle, you’re always going to bid well below market value. You’d be mad to pay “par” for such an unknown quantity, therefore the car should always get undersold *unless* it has a problem. Thus, as a seller with a sound example, you’ve a high likelihood of getting rinsed. (And consequently the buyer has to assume problems, compressing the price still further)
An exception I guess would be for one-off examples (eg Cilla Black’s Mini which was there today) - in this instances I can see the sense.
Bispal said:
I sold my F355 at auction in December. I tried for 4 months to sell my low miles, FSH, LHD, Manual F355 privately. Each time a 'time waster' came to view I lost half a day in cleaning, test drives and even arranging inspections. I wasn't being greedy I only wanted £53k and the car had just had £7k spent on bringing it up to really nice condition. I was losing a lot of time & that was costing my business with 'supposed' buyers. The couple of offers I had were so cheeky it was a joke.
The auction house contacted me and said they would sell it consignment for a reduced fee. I agreed and took the car to them. 2 months later it wasn't sold so it went to auction in early December. Almost 3 months later I still don't have my money. Every day I have been leaving messages & emails. I get the same excuse every time, cheques in the post, only the MD can sign and he's out of the country, we are busy preparing the next auction, cheques in the post and round and round in circles it goes.
Selling older exotic or niche cars is exceedingly difficult and time consuming. There comes a point where the time I was spending was costing me more than the auctioneers fee and I was losing faith in the human race with the contemptible time wasting. However as I still haven't had my money its a case of out of the frying pan and into the fire. I have now heard this from numerous other people who have sold at auction, the money is almost always late!
I won't buy another classic car ever again after this experience, and what makes me sick is that the car was for sale for almost 6 months at a reasonable price and someone paid more, with the buyers premium, than I was selling it for but I still got less than I wanted by quite some margin. At least the car is sold and I will hopefully get my money soon but this has been a dreadful experience. What is strange is the amount of people who rant & rave about the F355 and how great it is and its their dream car, but no-one is buying them, even when they are a bargain!
£53k for low mileage manual? —- where were you when I bought my 355 in November, on the face of it sounds very reasonable! Though to be fair the combo of LHD and possibly an “undesirable” colour probably make things considerably harder (bought RHD manual red/cream in the end).The auction house contacted me and said they would sell it consignment for a reduced fee. I agreed and took the car to them. 2 months later it wasn't sold so it went to auction in early December. Almost 3 months later I still don't have my money. Every day I have been leaving messages & emails. I get the same excuse every time, cheques in the post, only the MD can sign and he's out of the country, we are busy preparing the next auction, cheques in the post and round and round in circles it goes.
Selling older exotic or niche cars is exceedingly difficult and time consuming. There comes a point where the time I was spending was costing me more than the auctioneers fee and I was losing faith in the human race with the contemptible time wasting. However as I still haven't had my money its a case of out of the frying pan and into the fire. I have now heard this from numerous other people who have sold at auction, the money is almost always late!
I won't buy another classic car ever again after this experience, and what makes me sick is that the car was for sale for almost 6 months at a reasonable price and someone paid more, with the buyers premium, than I was selling it for but I still got less than I wanted by quite some margin. At least the car is sold and I will hopefully get my money soon but this has been a dreadful experience. What is strange is the amount of people who rant & rave about the F355 and how great it is and its their dream car, but no-one is buying them, even when they are a bargain!
Seemed to me like people were buying at the time - I actually got gazumped *twice* before landing one, and for figures considerably above 53k.
Perhaps one moral of all this is that in this market small “compromises” on spec can make a car extremely difficult to shift. As people are saying above, why would you really buy an LHD 599 unless it was an absolute steal? So people may well be buying 355s for example, but not ones of a certain spec whilst there’s decent choice about.
Under such circumstances I can see how an auction would appeal —> the options are very limited so you don’t suffer the comparative disadvantage.
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