SledgeHammer 2.0

I have bought and sold dozens of cars at auctions. The biggest advice I could give is that you need to know your number minus the commission (which is 10%) and that is it. Stick to that number... don't fall for the drop the reserve and it will soar bullchit line they give you. I have seen some many people fall for that, the reserve is lifted and not another bid is placed, mainly because the bid was shilled up that far and the only real bid is the sucker that placed the last one.

The only thing I don't understand that you posted was the marketing fee @ $450 a day. I have no idea what that is and have never paid that before... Granted it's been three years since I sold at an auction. Maybe that has changed.

Dan Hampton

Agree. I do not understand the OP's math. The only way this gets close to 18% is if he turns around and buys a subsequent car for $60K, paying the 10% commission after selling his car, paying 8%. (not including the other fees).

Bowtyeguy

I have a better idea. Post it here and avoid the auction fees. I have seen 2/3 cars in the last month sell within hours on the forum. Price it right and they will come.

Robert61

AZDoug

Maybe some of it is the same reason people play high stakes roulette at Vegas.
Doug

Ron Miller

I sold my 1965 factory air 4speed coupe, 327/300 hp matching numbers through a locally owned but regionally operated auction owned by a friend of mine about 4-5 years ago after trying to sell it through the forum. Had one gentleman, a professor at Univ of Colorado, Boulder who was interested and close, but decided not to pull the trigger. He was really looking for a 1963 coupe but really liked the look and appearance of my car. Lots of original items still on the car in good condition such as door panels, dash pads, every piece of glass including the windshield was original and dated. I bought the car in 1975 in Ft Collins, Colorado and owned it for about 40 years.

I was asking $50,000 firm but had no lookers or takers from the forum advertisement. A dealer friend advised me to try the local auction, he deals in a lot of collectible cars and had sold a 1966 A/C coupe about 10 months earlier for upper $40's through the auction to a firm out of St. Charles, Missouri called FastLane, and felt that if they were in attendance the car would sell to them if to no one else. At that time, the auction only had a buyer's premium of 8% I believe, seller paid a fixed amount for a no reserve listing and a few hundred dollars more for a reserve listing. I took it to the auction figuring at most I could be out only the $500 or so it took for the reserve listing. I also had a reserve set with the auction at $50,000, there or no sale.

The car bid up to the upper $40's (about $48 or $49 range as I recall, and I was asked if I'd like to remove the reserve, as they would often go higher with "no reserve". I refused. One of the ring guys ran some numbers through the calculator and showed them to the auction owner who then removed the reserve on his own. I later realized that they were determining that with a sale, they could make up the difference in the present bid price and my reserve price with a portion of the buyer's premium (8% of $50,000 would be $4,000) and make more money than the were about to make with only my auction listing fee alone. The auction owner removed the reserve, the bidding never went any higher, and FastLane Cars out of St Charles, Missouri bought mine as well. I got a check a couple of hours later from the auction company for $49,750 which was $250 less than my reserve price. When the owner removed the reserve price my fee dropped as well from the $500 or so for a reserve listing to a $250 fee for a sale with no reserve.

FastLane took the car home and did a couple of touch up paint repairs and listed it on their website about 2-3 weeks later for $69,995. It stayed listed for another 2-3 weeks and was gone! I was never able to find out who purchased the car or what the sale price was, but I had some items that could have been furnished, such as the spare tire carrier, original radio, etc. that someone might have liked to have. Someone on the Forum missed a great deal! And I think I may have been the exception to the "two out of three" rule mentioned earlier. I thought I maximized my selling price, minimized my selling costs, and got it done in the shortest time. OK, maybe zero dollars selling costs would have been cheaper, but I won't quibble over $250 on a $50,000 car.

Rdelvalle

Great discussions guys. Thank you for taking the time and staying civilized.

Ok here is my point, a buyer pays $67,716 which includes the 8% premium on a $62,700 drop hammer cost. I get a net $55,855. That is 10% commission minus the $575 Mrkt/tent cost from the drop hammer price. It means the Auction house made a profit of approximately 18%. What is wrong with this math? Is it not the Auction house making 18%?
So if someone is willing to pay $67,000 for a car that has a market value of approximately $57,000 then I should be able to sell the car with not much hassle for around $60,000. The seller and the buyer will both come out ahead.
The only way I will see anyone paying that much is if the bidding gets into a frenzy and people try to out bid each other.
Hardly ever happens unless it is a highly desirable unique one of a kind collectable car.
My only point is that for me personally it looks as if I try to sell the car on my own the buyer and myself will get a much better deal. That is not to say that if for example, if you do not want to go through the hassle of selling the car or need to sell it right away and are willing to take a bigger cut that an auction is not for you.
Bowtyeguy comments are well taken. On my research when I was going to sell the car it seems like the forum is the best venue to sell the car. I did notice that the cars in the forum go fast. I guess you are catering a group of people that are into you model car and there is a lot more trust for forum members.



This auction is happening in Fort Lauderdale Fl mid February 2019

SledgeHammer 2.0

Us in the car business call that the $10,000.00 detail, but it looks like fastlane got 20k for theirs. .

68hemi

Here is what we are questioning about your math. Here is a quote from your first post in this thread. "So if I wanted to sell my car with reserve, which is the only way I would do it, I am 18% +$575 handicapped," You also alluded later that it was costing you 18% +$575 which is NOT the case. Yes you are HANDICAPPED compared to selling your car privately compared to through the auction BUT you are not incurring ALL of those costs, the buyer is paying his buyer's premium. He is indirectly paying your seller's cost if you look at it as I do and pointed out in post #15 compared to the difference in your net and the buyers cost if you sold it privately rather than through the auction so really the buyer is the one that is handicapped for the numbers your are referring to.

Ron Miller

Rdelvalle, I understand completely your logic, rationale, and math. However, it didn't work out that way for me. I think one reason I didn't have more interest is that I'm not located near a major metropolis, St. Louis is about 180 miles away, as is Memphis, the closest two large cities. That's a big disadvantage IMO. I know that my experience is almost certainly the exception rather than the rule, but that was my experience. I failed to mention that Sherm Smith, the auction owner, was a long time friend of mine from high school days, and he had requested over the years when I was contemplating selling the car that he'd like to sell it for me. After failing to sell it on my own, that's exactly what I did.

Sledge, I'm not sure what Fastlane got for their sale, but I know what they paid for the car. Invested a bit of time and labor with detailing and a couple of small paint repairs and sold the car for a profit I'm sure. But, I was unable to do the same, and don't have any regrets. I got the price I wanted, FastLane made money I'm sure, and the auction service made money as well. Winners all around . . . . .

Fastlane has a lot of cars on their lot, a quick google search will show the inventory and pricing. I have a friend who lives near there and when I visit, we usually drive down and check out all the cars for sale. Usually have 5-6 mid year Corvettes, a few more older and newer. And lastly, best of luck to you in whatever you may decide to do!

Rdelvalle

68hemi yes my mistake on the #1 above, 18% should include the $575. I stand corrected. Nonetheless it is still 18% spread between the seller cost and the buyers take. My other two examples I believe I have it correct including the $575 in the 18%.

Ron when is started to look into selling my car I thought, naively, that Auctions fees were like what you got. I thought well that is definitely the way to go. A buyers premium of 8% and maybe some flat fee for the seller in your case $500 for reserve and some other expenses. I would jump on that anytime. But I was rudely awaken by the terms of the Ft Lauderdale auction which I think is way too much. Again you are talking about a buyer paying $67,700 and the seller netting $55,855 or 18% spread between the seller and buyer.

The same numbers with your scenario: $60K reserve plus 8% is $64,800. So seller gets $60 minus the $500 which is $59,500 which is 9.2% spread between seller and buyer. That I see as very reasonable.

My question to others is what do you expect are the real auction costs on average. Is the Fort Lauderdale auction fees an outlier or are those the terms on current auction houses?

Ron Miller

Here's a screenshot of the consignment fees currently charged by Smith Auctions LLC, the local firm I used to sell my car. Sherm passed away a few years back and it is now successfully operated by his son, Sherm Jr. They once ran annual or biannual auctions in several midwest cities, including Cape Girardeau, MO, Paducah, TN, Dallas, Tx, Oklahoma City, OK, Jonesboro AR, Springfield, MO, and a couple of others I don't immediately recall. I think now they may be limiting to twice annual auctions in Cape Girardeau and Paducah and a couple of other locations. Not sure, but they have a website that a quick Google search for Smith Auctions LLC will bring up. They are headquartered in Dexter, MO, about 8 miles from my small hometown.

Their fees have changed over the years, as do all businesses, and according to one of my local friends in the business, they are contemplating going to a higher percentage fee for both buyer and seller. Hasn't happened yet, and not sure what may transpire in the future. But, I do know that their auctions are quite popular and draw interest from a wide geographic area. And, their percentage of sold cars going through the ring is also pretty successful.

For what it's worth, here's a screenshot summary of current listing and sales expenses for a seller's vehicle. Complete details for both buyers and sellers of vehicles, as well as other items such as memorabilia are available at the website. Hope this is of some help and interest to yourself and others on the forum! Best of luck! :

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449er

What 65 GTO is worth 133k? She netted 75k which is top dollar for that car. You also know going in what the fees will be, Mecum or Barrett/Jackson offer a service to people to sell their cars for them, they are not thieves

Fatdaddy

The way it looks tome you would pay 10% not 18

vetteLT193

I owned a 66 convertible, ermine white with green interior. I had the numbers matching 327 on a stand, and currently installed was a 1995 corvette engine with efi. Side pipes, aftermarket AC. Car drove great, ran great, always started, sounded great, and didn't smell. It was an easy car to go back to original if wanted in 20 years if the value dictated it. The paint, chrome, and overall condition was near flawless.

This car was unsellable. The color combo or something drove buyers away. I bought it after it was for sale for over a year for 37,500. I loved the car but I have 2 young kids, just didn't work. I tried selling with no takers even though everyone that drove the car loved it. I traded keys for keys on a BMW M3 worth around 45k at the time.

After that it was traded a couple more times until the last owner took it to Mecum. No reserve. Sold @ 68k without the original engine and a note that the VIN tag was suspect (it wasnt so that was very strange note to me)

Bottom line is sometimes having good comparisons all in the same place and seeing a car under the lights and in the action is what it takes. With the premium it went for 75k. So in that environment it doubled in value somehow.

Rdelvalle

I spent the whole day at the Ft Lauderdale Collectors Car Auction & Show auction. Most of the cars did not sell. Only one car reached the reserve. A few others the owner took the reserve off, or sold it at the last bid price below the reserve, maybe five of the them. I think, my thought, that the reserves in most cars is way too high for the reason that to get the cars market value you have to be high because you pay 10% plus the owner has to pay 8% and that then makes the car price above the Mkt value. I am not trying to knock off auctions, I am just trying to understand the logic of when it makes since to go the auction route. Obviously vetteLT193 case was an auction success story.
There was a 59 corvette Crown Sapphire, single quad 230 hp convertible, no hard top that was bid up to $80k but did not sell. I do not know what the reserve was since the owner did not take it off. The car paint was nice and overall it was nice however the fender chromes did not aligned with the lights chrome they badly mismatched. It was clear that they were not the originals. Also the hood and trunk emblems were not the original as they were poor quality aftermarket. Why did the owner did not take the reserve off was a mystery because $80k in my opinion was a very good offer for that car. I do not think the person would sell that car for that much on his own. So here I thought was a case where the auction was a good venue for that car yet it did not sell.
The moral of the story for me is then to do not sell your collectables keep them and pass them on to your son/daughter or grand kids and let them fight it out.

hope2

It is surprising how popular the auctions are. What they really are 90% of the time is a car lot. The auctioneer knows what the buyer wants and will run the car close to the required number. If you doubt this watch when they actually two real live bidders. Everything changes, cameras zero in, announcers can't stand it, they wet their pants. Back to the running up, if someone grabs the fish hook, they work him, if not to the agreed price the theater starts with "dealmakers" If not sold, they go to bid goes on where the inflated price becomes the floor.

That said, auctions are a nice place to go see a lot of cars. If you are buying there, know exactly what you are doing, beware of the fish hook. The auctioneer is not your friend. No reserve? Don't bet on it.

If there was a fair and square auction, auctioneers don't know "reserve" and bidders were acknowledged with paddles, collector car prices would drop 30%.

cv67

Many think their cars are worth a lot more than they are. 80k was damn good money, lets see if that happens again

PAmotorman

if you need the money and can't wait for the right buyer to come along.

nutter C1

Isn't an auction a way to get the money guaranteed its there and good? Don't the auction firms pay you and not the buyer, so no scam worries?