After reading this article, I got to think that these highly publicized auctions, are more into the glitz and glamor! You take your chances, but I don’t think it’s wise to buy and sell almost immediately. The “collector” that has quality stuff, isn’t doing this? Unless there’s some circumstance that happens, these are rare examples to my knowledge. That’s why you must do your homework students!
I’m not sure the “annualized” percentage is a meaningful number. The car may have sold for the same price if the auction had been a year later, in which case the multiplier would be zero. 25% is 25%…you can’t arbitrarily project it out.
In defense of the Firebird Formula 1LE that sold for 16K and then for $9K The car was damaged between auctions, I heard it was as it was coming off of the auction block. Also the car had 130,000 miles on it.
Annualized rates of return is a perfectly normal thing. Banks quote APRs with nearly every product they offer.
The real problem with the figures quoted is the don’t account for auction costs. Buyer’s premiums were paid at the first auction and seller’s fees were paid at the second. Without even accounting for other costs (vehicle transportation, auction entry/bidder’s fees, lodging, etc.), these fees dramatically alter the profit or loss, reducing perceived profit and increasing actual lose.
The rates of return presented here are only good for the flipper to brag about his success to his friends.
Auctions are not a place for the naive. I stopped going to them after seeing one too many “strange” events. I won’t go into them, but experienced people know the details. If anyone expects auction results to give true and accurate data, you’re living in a fantasy world. Auctions thrive on alcohol, confusion, and speed. Like anything else though. You have a full spectrum from very good to very bad in the industry. If you accept auctions like predicting the weather, you will get the happiness, (and data), you’re looking for.
I agree with TMH that the auction costs impact the losses/profits drastically. Most houses charge both the buyer and seller 10% plus the buyer/seller might have sales taxes and transportation/housing costs for two auctions. Your listed costs show those final auction commissions but without a dealer’s license and out of state transport there is sales tax on the purchase.
Thanks John - the author seems to be ignorant of the facts. Every car has a story, you just need to find who knows it.
The 1991 1LE Formula was an anomaly, a blip, a mistake really in it’s 2nd auction. It’s rarity, option load and condition in any other make, model or time period would place it in top 10 in value. I was the owner who, along with my 91 1LE Z28, sold it at BJ in June. It hammered at $19,000 to an empty room late in the evening after all the energy had left once the last front engined Corvette had been sold. Even with that, it is likely one of the highest prices paid for that era of Firebird at auction where low miles command the day. Upon leaving the block and prior to being parked it sustained damage - to what extent I have no idea, but it was disclosed and the winning bidder declined the car. BJ took the car back to AZ, had it repaired and brought it to Las Vegas, running it through at a less than desirable time slot - it did poorly. I haven’t seen it since so cannot attest to it’s condition or presentation but I do know there was little to no publicity of it prior and they used the same pictures I provided them just like you did - that’s my picture, not theirs.
Had I been there, I’d have bought it back. Somebody stole that car and will get to enjoy it’s rise in value. To say that sale signaled the end of the 80’s cars is akin to claiming the sinking of the Titanic would herald the end of the cruise industry - one has nothing to do with the other.
If the article was written to generate clicks, you may have succeeded. If it was intended to accurately predict upward & downward market swings, you’ve failed - at least in this case.
@chrishaggerty1 - Interesting. I sent you a message and would love to hear more about this situation. We were not aware of all the backstory behind this specific car.
My friend bought that car It’s now in New York Gonna drive it in the spring
How could I find out what the damage was when the Firebird was coming off of the auction block? Does anyone know?? I am the present owner.
John, sent you a message. Great car - not sure where you are in NY but wouldn’t mind seeing it again. Pic in the tunnel waiting to cross the block.
Turning the corner at the end of the auction.
This just proves that many buyers buy from the heart. BJ has shown to be a leader with a owners/drivers desire.
I, too, have fallen in love with a car in the line up. I’ve never been sorry.
A lot of people have an, “I can a flip it for $ mindset.”
The funniest implosion that I saw was the VW from the Seinfeld Porsche auction.
When he sold it the hammer price was around $100k, when it sold at the firt Barrett Jackson Ct. auction it was around $20k.
Serves 'em right.
I don’t believe this article claimed or attempted to project anything, only to entertain. It showed some extremes in good and bad flips, exaggerated by extremely short periods between the buy & resell in most cases. It was just meant to be fun, IMHO. Who doesn’t like fun? I like fun, especially free fun. Doesn’t cost 5¢ to come here and read it.
I have pretty much turned off on automobile auctions. The only reason I go to The Kissimmee Mechum auction (which is in my home town), is to see many of the cars I have owned in my past. Which is also the reason I have not been in years, too difficult to see old car’s which I have owned. My second owner 1968 GT-350 rolled across the Mechum platform about 13 years ago. I was not the owner then, it sold for $34.500. The following year it sold for $134.000. The only reason for the price was because my cousin Carroll Shelby was there. It was a frenzy of too many dollars and no sense. No if you want to buy at fair reasonable price do it in the front yard. Works every time and saves big dollars. E. Shelby Hall
This article helps reinforce a feeling I’ve had for a while regarding the automotive auction scene, namely that it’s a closed system. Here we have solid evidence of that – the same cars selling over and over and over again. It’s an auctioneer’s dream.
^Part of it for sure. There’s a couple of magazines that follow auctions and they often reference the last 2-3 times they have seen a particular car sell in the last 10 years. Most of the time the cars barely have off-the-travel miles added in the course of years.
It’s no different than baseball cards or “graded and sealed” comic books. They become an investment commodity which isn’t really any worse than when it is an item to look at during a party or two then flip when boredom arrives.
If I am ever at the point of buying a car at a televised auction --I’ll drive the wheels off it (whether McQueen owned it or not).
Way too many generalities in this article and in the subject matter. What really matters is the butts in the seats. Who is there that day. That’s why auctions have reserves.
It’s not the cars selling at auction, it’s the junk of the same make and model, but not the same quality, selling on Craigs List to rubes.
^You had me at “rubes”.
I think there is more than a few of those at the auctions too.