I have 20 years experience buying cars at auction… auctioneers taking false bids is common practice and not illegal. I see inexperienced buyers fall for it all the time…costing themselves sometimes thousands
From the number of responses on this topic, I’d venture that it deserves more coverage or at least a follow-up. How about some advice about which house to visit depending on your type of car? Or perhaps a comparison of the commission rates of the different auto/motorcycle auctions? Or the fee structure and all of those hidden extras?
Only people making money are the auction houses and they absolutely have Shills in the crowd knowing what the reserve is on EVERY car. Seen it happen at Mecum in PA a few years ago.
I buy and sell motorcycles at auction for a living. I attend specialty car auctions regularly. Hard to vet a vehicle under any scenario but usually an owner is a reliable source of information. Best to establish a price you are willing to pay for a vehicle and then get out if the bidding exceeds that number. The three things you never chase are buses, women and auction vehicles, there is always another one coming.
RGMCFA, Everybody pays taxes. It’s just at an auction you pay when you win the bid. If you buy from an individual you will pay the same taxes based on your purchase price at BMV.
There have been a number of mentions about shill and ghost bidders. It is common practice in the auction industry for an auctioneer to “place a bid on behalf of the seller” up to the unpublished reserve. Nearly all major auction houses do this, although there are some that explicitly do not. You need to read the auction terms and conditions closely to find that clause.
This is common practice to help a buyer and seller meet a minimum threshold to consummate a deal. In many cases, at least in art and real estate, the seller is at hand to accept a bid below reserve if that seller feels the auctioneer has met the market. This is a combination of attendance, registration and active bidding on a particular auction item and happens in real time through hand or electronic signals from the auctioneer to another auction employee who is encouraging the seller to accept a bid from the room or walk.
Remember, the auction company is there to make money. They get a fee from the seller to list (oftentimes), a commission from seller on a sale and a buyer’s premium from the buyer when they deliver a successful sale. Most auction companies front all the marketing and event costs to justify these fees and they have every interest in getting the seller the sell and the bidders to bid!
Need more advise for selling strategy. Like when and why to opt for no reserve, besides no cost. And is the slot in the lot numbers or bid order negotiable? Then when is best, worst?
I was at a local estate auction and a Corvette was on the block. The auctioneer stated that it was a “numbers matching Vette!” After the bidding slowed a bit, he then stated that it had just had a “crate motor” installed. I asked him, “Which is it? Either it is a numbers matching or it has a crate motor. It can’t be both.” The bidding stopped right there, and the car didn’t sell to my memory.
What if your a phone bidder???
I have 35 years experience buying and selling cars at auctions. If you read the contract you will find that all of them that allow “reserve prices” have every bidder sign an agreement that permits the auction house to bid up to the reserve price on behalf of the seller. This is an established practice at auction houses that sell with “reserves”. It is a critical part of the process because when there is only one bidder left and the reserve has not been met a no-sale will result. By bidding on behalf of the seller they might convince a few more bids out of that sole bidder. Unfortunately, part of the art of an auctioneer is to make this process as invisible as possible. As a frequent buyer I understand this process and accept that it is the normal business practice. They will all freely explain this to you, but you have to ask. Otherwise it is buried in a lot of fine print. Sad that this was not directly addressed in the text of the article. The experts on the panel are very aware.
Another thing to keep in mind is what vehicles are hot in what parts of the country. I purchased a BMW M5 at the Dallas Mecum Auction where the largest volume of vehicles were pickup trucks and muscle cars. Similar vehicles were selling for $10K higher in Florida and California auctions. I got a deal by buying the right car in the right place.
Speaking of the right place, I am looking for the best auction house and location to sell my 1954 Corvette, numbers matching, body off, nut and bolt restored. Completed 3 years ago and has 500 miles since restoration. Car is condition 2+ to 1-. Anybody have any good suggestions?
Barrett Jackson will bring you the most money if you’re looking to gamble at no reserve. Corvettes always do well there
Collector car auctions are just another part of the collector car hobby and serve a very valuable purpose. First of all they bring buyers and sellers together so you can get an accurate view of where the marketplace is heading and also where trends are forming as it pertains to certain vehicles. When values rise more cars get restored and more parts for those cars become available which helps EVERYONE who has a collector car. You may prefer buying private party but where do you think those sellers get their asking prices from? An auction might not be for everyone but neither is a cruise night or a concourse or even a swap meet. I always tell everyone they need to experience Barrett Jackson Scottsdale at least once as a bucket list item as if nothing else it’s the one of the greatest car shows anywhere in the world.
OK, how do I find a consultant? Are their lists? Do they advertise and where? What do consultants’ duties entail?
I disagree by time you get your corvette there and pay the fees you will do just as good on ebay but only if you go no reserve . When you go no reserve on ebay people know your serious about selling and the bid always goes higher. I always list my cars for 10 days that gives plenty of time for the whole world to see it . Make sure you have good pics top to bottom and lots good info and history about the car in the description. My cars have always sold for what their worth and its always right on with the Hagerty value guide .
I sorry but did you not just read all the post about fake bidders & buyers and all the other crap that auction company’s pull to get the price up ? I sorry but that translates to fake values ! Collector car auctions and Collector car dealers have done nothing but artificially inflate the value of every single Collectable car & truck out there ! They are the worst thing that has ever happened to the hobby ! Its absolutely stupid what people with too much money are paying for this stuff ! I have the money and I have owned just about every one of these cars at one time ! But I refuse to pay the price they think there worth now !
So you hate the auctions but you auction your cars on ebay? Makes perfect sense…
speedcitycycle, Thanks for your note. I don’t know how every state handles it, but in Illinois, if you buy a car from a private party (whether at an auction or otherwise) there is a “title transfer fee/tax” that you are required to pay when you apply for a new title, but that fee/tax is lower than the sales tax you’d pay if you buy it from a dealer. The sales tax is 6.25% plus any local taxes. The seller of the car I bought turned out to be a dealer (from Texas), so Illinois charged my the sales tax. Thanks again!