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Car auction fees

Darius

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WHY would anyone give soooooo much of their money to these crooks?? I know, they have big overhead blah blah. 10% to the seller, not to mention extra fees to make sure you don't get Tuesday night at closing time , but have any of you looked at THOSE fees?? I guess to those playing the collector game this is a cost of doing business but to a hobbyist it does not make sense to me. I suppose desperation plays in to some degree. Then there is the risk of low bidding to worry about as well. A double screwing. low dollar PLUS sellers fees. I don't get it.
 
Vegas style flashing lights and giant arrows pointing to your car and a screaming frenzy showboat sales presentation?
 
YY1 nailed ! There is always a *** for every seat just not this one!
 
I’ve run a few cars through mecum auctions over the years. Interesting thing is the dealers bring a lot of cars. Pretty sure they are independent people who do not work for mecum. They I’d bet do not do the 10% seller fee as they fill the auction. We private one car people pay that.

going forward if I do that again would likely use Russo- Steele in a local January auction. Still 10% though.
 
Mopar Action magazine had an article a few months back about this huge car even in the Middle East. It was a big deal to have all these valuable American cars get transported across the globe to get there. The auction there was a BUST though. Saudi Arabia has a strong anti-alcohol climate, a component that often fuels the bidding frenzy of car auctions. The bidding was also tepid because most of the time, once a single bid came in, the other buyers sat on their hands due to either social politeness or some custom unknown to us Western dwellers.
 
Auctioneers around here tried to institute buyers' premiums and it didn't go over. I kept going to their sales, but kept the 10% in mind as I bid.
At a previous sale, I went to $140 on one Cerwin Vega speaker. They retail new for $3500 per pair. A friend beat me out. That's okay, they'll make more.

Fast forward a few years, now with buyer's premiums, and he promised to never attend these auctions. He was one of those guys that never missed an auction. True to his word, he wasn't there the day I bought a pair of identical CV speakers for $25 (plus a $2.50 premium). I was the only bidder interested. Had he been there, he said he would have paid more than the $150 he paid at the previous auction. Of course, I didn't tell him about the speakers until the auctioneers had abandoned the premiums and he was back at the sales again. I sold them for $1400.

The auctioneer asked me what I thought about the new premium, and I said, if it makes you more money, that's what counts. I don't think he was making more as it was obvious my opinion angered him. Seemed like an obvious business decision to me.
What I didn't say was: Make it a 20% premium and I'll have even fewer people to bid against.

All that to say, BJ bidders should keep that premium in their head and subtract from the total they decided they are willing to pay for a car. You want to decide your highest bid beforehand and maybe bump it a little if that gets it bought. If you're wanting to pay $15K, you might as well go $17K if that gets it. After investing the time and effort, one might as well bump it. If it's worth 15, it's worth 17. As you said, it can hurt the seller sometimes, but the price will stay only so low, or else somebody will think it's acceptable and jump in. That is one risk in selling at auction: there may be only one serious bidder that day. We hope for a few emotional bidders so the price will go high, but there is no guarantee. That's where reserves come in, but those are expensive too.
 
25 minutes with the "sold sticker girl" and you can have 10%.
 
You SELL a car at auction because that is where the money is found. And huge advantage, you are done with the car when the hammer falls, no dumbasses calling to bitch about this or that. That alone is worth the 8-10% sellers fee. Clean and simple.
 
I see cars sold at these auctions and then show up a week later at double the price on eBay etc. I wonder what percent of cars in North America are owned by dealers. Seems like they are controlling the prices I liked it better when it was all hobby.
 
Mopar Action magazine had an article a few months back about this huge car even in the Middle East. It was a big deal to have all these valuable American cars get transported across the globe to get there. The auction there was a BUST though. Saudi Arabia has a strong anti-alcohol climate, a component that often fuels the bidding frenzy of car auctions. The bidding was also tepid because most of the time, once a single bid came in, the other buyers sat on their hands due to either social politeness or some custom unknown to us Western dwellers.

A friend of mine was there representing one of the cars at auction. He said the biggest issue is the culture over there forbids gambling and they consider bidding against one another as a form of gambling, so after the first bid goes out, everybody else bails. The car my friend was there for did not sell, got lost for a while and took about 8 months to make it back home. Somebody lost their *** on that auction.
 
it's a captured audience with people there to buy
and approved credit/loans or cash waiting to buy
all under one roof
they definitely have a market place
10's of millions $$$ in sales several times a year

many cars sell for more at auction than they'd sell privately

I don't like the fees either
many are 10% for buyer & seller on reserve cars
the nonreserve cars are lower fees, like 5%-6%
pretty good money for the auction co.,
for a lil' advert. promos & 2 - maybe 5 min.'s on the block

if your selling at more than 10% OVER normal value
it's not so bad

I think some do it for the TV & fame too
attention whores & it gets their names out there too

depends on which auction house

some sellers or restorers exclusively sell thru the big auction houses
I'm sure many 'get a deal' for multiple cars or full collections too
 
You SELL a car at auction because that is where the money is found. And huge advantage, you are done with the car when the hammer falls, no dumbasses calling to bitch about this or that. That alone is worth the 8-10% sellers fee. Clean and simple.
Couldn't agree more, never bought at auction but I've sold almost every car I've owned at auction. Quick and clean. No haggling, if your satisfied walk away with your check.
 
Probably 10 years ago my buddy was down at a BJ auction. A BJ rep was going around asking sellers to lower their reserve saying the cars would never sell at their reserve. A few guys did. Cars sold. Then BJ had them at the next auction for almost double the money. Go figure. Kim
 
Something never to forget....auctions are in the business to make money for the house. Period. The buyer and sellers are a commodity. And given the chance the house will always win!
 
My point exactly. Why risk YOUR money for THEIR profit.
They don't care how much YOU make because THEY make bank on EVERY sale.
 
Barrett Jackson is a 99.9% no reserve auction
has been for a very long time
(since back when they did brass era & old luxury stuff
when they started in the muscle & collector car market
they did the 99.9% no reserve, very few cars have a reserve now
at Barrett Jackson auctions
)

every car across the block sells
 
Has anyone ever actually seen the sold sticker girl's front side?

That's NOT her main attraction.
 
The concept of collector car auctions has always baffled me. Ask yourself, what value do they add to the car hobby? Here are some Pros & Cons; I like them because they are exciting, have bright lights and a lot of excitement. They are also a good pseudo snapshot on what the auction market is on a given item, sort of. It is important to note that the auction market is a very different market than two people standing next to each other in person negotiating and conducting a transaction. Buying hay or cattle or antiques at an auction, in person, is one thing, but buying something like a vehicle at an auction, site unseen no less, is not for me. It is a fad that has thankfully cooled for the prudent car collector yet blossoming for the mainstream public. Note the term prudent I used there. Auctions are marketing events and while I love to see the wheels of commerce turn, as a buyer my preference is to spin my wheels a bit slower.

I like auctions because they are pseudo public transactions where the data can be used as “comparables” to like-kind items. While they are in fact skewed with buying and selling fees, and hype, they can be used as a guide, a VERY loose guide. I don’t know if the buyer was there in person. Nor do I know how much they inspected the car, or if they even drove the car. Maybe the sale price resulted from an auction that took place on a Thursday where there were 4 people in the room. The hammer still dropped, the car still sold. Is that a good reflection of where the market is at for that car? 4 people in a room on a Thursday someplace in Ohio? Worse yet somewhere in the desert?

Every car has a story and that story is a huge factor when I buy or sell a car. The story must be shared and understood. I have to ask when buying or selling a car at an auction, or even worse at an online auction, how much of that story is able to be told and conveyed from seller to buyer? The auction house acts as a facilitator between buyers and sellers. There is immediately an insulator inserted between the buyer and seller, online or in person. This is going to restrict the conveyance of the story. That is a problem for me.

Auctions are a game you need to understand before you play. I have bought and sold cars at auctions, and because of my experiences, and the reasons shared above, I avoid them for business but enjoy the people watching, the cars, and the social aspect. Again, good entertainment and eye candy. However, I have seen first hand cars “short-saled” or “quick-hammered” to an auction house’s good buying customer. Often times the bids being announced are fishing bids by the auctioneer. There is not any real money behind the bids even though the bids appear to advance in steps. This is just one example of the smoke and mirrors that take place. Know your auctioneer and watch the room. Again much too fast and loose of a game for me to play in. No thank you. Please tell me what value these big auctions add to the collector car hobby?
 
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