Bruzilla
Well-Known Member
I've been running the numbers after the latest Mecum auction as I like to do to see where the hobby might be heading, and I saw some interesting data coming out of this one.
There were 770 cars sold this weekend, 213 on Friday, 314 on Saturday, and 243 on Sunday. One of the big issues I've seen with Mecum auctions is a very high number of Bid No Sale (BNS) cars that do not sell due to reserves not being met. Barrett Jackson doesn't allow reserves on most cars, but Mecum does, and historically I've seen BNS rates in the mid to high 40%s or higher over the past few years. This weekend was different. The BNS rate for Friday was 25.9%, Saturday was 32.8%, and it wasn't until Sunday that the rate hit the 40% mark at 41.8%, resulting in a running average of just 33.5% for the auction. This is a very low rate for a Mecum auction and I was wondering why it had dropped.
One thing I noticed that was notably different was reserves were being dropped while many cars were still on the block. This used to happen every now and again, but most BNS cars were sold well after the car had crossed the block and post-auction negotiations resulted in the car being sold. This past weekend most of the cars had reserves and most of the reserves were pulled before the close of bidding. This is a very significant change, and I can onlythink of two likely reasons for it.
The first reason would be Mr. Mecum was sick and tired of losing close to half of his commissions every auction due to BNS cars and was cracking down on reserves, but most of the cars had reserves and Mecum can't set reserves or decide when to pull them this weekend any more than he could at any other auction, so I don't see this as a likely reason.
The second reason, the one I find more likely, is that sellers are finally adjusting to the new realities of the market and lowering their expectations for what the car will sell for. I'm also sensing that more buyers than ever are looking to get out from under their collector cars so they are more willing to take a loss as long as the bid amount isn't a total loss for them. If they're selling a car they spent $50k on, and can see the market declining, it's better to sell the car now for a high bid of say $35k than keep the car and maybe get even less the next time. You see reserves getting pulled while cars are on the block a few times, you see guys wanting to jump start bids by pulling the reserves. You see a fair number of guys doing it, you see some owners who want to avoid taking the car home. You see a large majority doing it, I think you see a trend of owners who want to get out of the market while they still can.
One other trend I saw was a large increase in the number of 1975+ cars that crossed the block, especially GM cars. There were a lot of late 1970s and 1980s coupes crossing the block in numbers I've never seen before. This bears some watching as it could indicate a sea change in either demographics related to age, i.e., kids who grew up in the 70s and 80s are becoming more involved in the market and want the cars they grew up with more than 60s/70s cars, or the price points have gotten to the point where buyers are growing tired of paying top dollar for 60s/70s cars and are looking for more affordable cars to collect.
There were 770 cars sold this weekend, 213 on Friday, 314 on Saturday, and 243 on Sunday. One of the big issues I've seen with Mecum auctions is a very high number of Bid No Sale (BNS) cars that do not sell due to reserves not being met. Barrett Jackson doesn't allow reserves on most cars, but Mecum does, and historically I've seen BNS rates in the mid to high 40%s or higher over the past few years. This weekend was different. The BNS rate for Friday was 25.9%, Saturday was 32.8%, and it wasn't until Sunday that the rate hit the 40% mark at 41.8%, resulting in a running average of just 33.5% for the auction. This is a very low rate for a Mecum auction and I was wondering why it had dropped.
One thing I noticed that was notably different was reserves were being dropped while many cars were still on the block. This used to happen every now and again, but most BNS cars were sold well after the car had crossed the block and post-auction negotiations resulted in the car being sold. This past weekend most of the cars had reserves and most of the reserves were pulled before the close of bidding. This is a very significant change, and I can onlythink of two likely reasons for it.
The first reason would be Mr. Mecum was sick and tired of losing close to half of his commissions every auction due to BNS cars and was cracking down on reserves, but most of the cars had reserves and Mecum can't set reserves or decide when to pull them this weekend any more than he could at any other auction, so I don't see this as a likely reason.
The second reason, the one I find more likely, is that sellers are finally adjusting to the new realities of the market and lowering their expectations for what the car will sell for. I'm also sensing that more buyers than ever are looking to get out from under their collector cars so they are more willing to take a loss as long as the bid amount isn't a total loss for them. If they're selling a car they spent $50k on, and can see the market declining, it's better to sell the car now for a high bid of say $35k than keep the car and maybe get even less the next time. You see reserves getting pulled while cars are on the block a few times, you see guys wanting to jump start bids by pulling the reserves. You see a fair number of guys doing it, you see some owners who want to avoid taking the car home. You see a large majority doing it, I think you see a trend of owners who want to get out of the market while they still can.
One other trend I saw was a large increase in the number of 1975+ cars that crossed the block, especially GM cars. There were a lot of late 1970s and 1980s coupes crossing the block in numbers I've never seen before. This bears some watching as it could indicate a sea change in either demographics related to age, i.e., kids who grew up in the 70s and 80s are becoming more involved in the market and want the cars they grew up with more than 60s/70s cars, or the price points have gotten to the point where buyers are growing tired of paying top dollar for 60s/70s cars and are looking for more affordable cars to collect.
