Why would you sell in an Auction
 

I was recently considering selling one of my two collection cars.There is an auction coming up February in Fort Lauderdale Fl. After carefully reading the contractual terms of the auction it seems to me that it was not a good idea to sell via auction. Here are the terms:

Seller Commission: No reserve 8% Reserve 10%
Buyers Premium: 8%
Marketing fees: NR $300 R $450 per day
Tent: $125 for three days

So if I wanted to sell my car with reserve, which is the only way I would do it, I am 18% +$575 handicapped, that is a heavy price to pay for selling your car. After subtracting the auction's cost from the car's market value it seems to me that you are going to lose money.

My question is, is there something I am overlooking or is it a bad idea to sell your car at auction. What make it attractive that I read in the forum of many members selling in auctions. What am I missing? It looks as if the auction house makes all the profits. The bank (the auction house) always wins.

What are the most successful ways members have sold their cars? Successful defined as maximizing selling price, minimizing selling costs and shortest selling time.

I would never sell at an auction. Or buy at one. They are a complete turn-off to me.

I would never sell my car at an auction simply because after 4-5 decades of ownership and personal work/care, I would want the new owner to have the honest desire to carry on from me the same way. In an auction, Joe Flipper could buy it and it's all over. :cheers:

at least you get people bidding ,that have money,

most adds just get you jerk-off's and time wasters or scammers

Exposure to people with money wanting to buy a car. Not just people wanting a car and wishing they had some money. I wouldn't, but a lot seem to.

I have been to an auction and have followed auctions and there is a large amount of cars that do not sell. That is because, I suspect, the reserve is too high. If you take the reserve off then you still have to pay the commission on the original reserve price. Unless the auction house negotiates with you on the spot which I am sure you are going to lose. Just because you have money does not mean that you are going to waste it. If a car is a very unique highly sought after car then I can see it. The hope of most sellers is that the bidding gets into a frenzy and people get carried away and the price goes up above market value. Although a nice wish I have not seen this happen often on car auctions.
It seems like a great numbers of buyers are there to get a steal. Dealers, flippers and others looking for a bargain. It does not seem to me is in the sellers best interest. If you have no reserve I think you are best of going to Vegas and playing the slot machine. Please humor me and tell me I am wrong with my assessment.
Also what are the best way to sell your car other than auctions.

Someone correct me if I'm wrong, but I don't think you are in for 18%. I think it is 8% no reserve, and then another 2% if there is a reserve. If it truly is 18% then :eek:

"Successful defined as maximizing selling price, minimizing selling costs and shortest selling time."

Sorry, but at best you can only get 2 out of 3. So which 2 do you want? If your car sells (hammer price) for $100K, you'll get $92K (or $90K) less your marketing and tent fees. Emotions get the best of people at auction sometimes ( I think more so than if they answer and ad and show up at your house) which can cover your commission and fees. This is a general statement and is not to be taken literally. On the other hand, some buyers go home mad as hell their car didn't sell for more. So, auctions are not for the risk adverse.

Not all cars are for all auctions. Best to do some research and see what other cars are for sale and if they are in the same caliber as yours. You don't want to sell $10K diamond earrings at the local flea market.

If I were you, I would come up with a fair market value and ask yourself if you are willing to sell it for that much. This does not mean to price it based on how much money you have in to the car. Then advertise it a little higher on free places like ebay, here on the corvette forum (assuming its a corvette), or CL. You might get a quick sale. If not, then reevaluate.

If you need to sell then an Auction can usually get it done. If you are patient and have time to wait for the person that fits your seat then there are better ways to sell, like advertising it on the forum.

Depends on how you look at it. If the hammer falls at $100,000, he gets $90,000 (assuming he had a reserve), which is a 10% seller premium.

But the buyer pays $108,000. So in one sense, his $90,000 net is 16.7% off what the buyer was willing to pay ($90K/$108K).

Let us say that you do your due diligence and after looking at what similar cars are selling for and you use the Hagerty valuation tool and you determine that your car is a #2 condition with x options and the market value is $60,000.
So let us do the math, to sell it in auction take off 8% buyers fee. Why you reduce it is because the buyer, if they did their due diligence, is not going to pay more than the market value of $60,000. So that means a drop hammer price of $55,200 or the buyer is over paying. It is also assuming that the buyer is willing to pay the full market value.
Now subtract from that the 10% reserve seller commission and you have $49,680. Minus the $575 marketing and tent fees and you end up with a net selling price of $49,105 or approximately 18% of the market value.
If your car is valued at $60k and is a vintage desirable car you might get between $57k to $59k selling it yourself depending on market conditions. That is a significant amount of dollars difference.

I am not trying to knock off auctions. I imagine it serves someones purpose. It is just when I was going to sell my car and did my due diligence I was taken aback on the cost to sell it at auction. I could not understand and still can not why would you consider selling a car in an auction.If you have a very unique car that is highly sought after, one of a kind, maybe. But if that is the case I think you can easily sell it privately and optimize your selling price. Maybe you have so much money you do not care and do not want to bother then yes have at it, the auction way is for you.
By the way the Seller commissions, Buyers premiums and marketing/tent costs are real numbers. You can check it out in an auction coming up in mid February in Fort Lauderdale Florida. This are not made up numbers.

Never bought or sold at an auction....only eBay and Craig's List....and a consignment shop once...
I did have some "tire kickers" on eBay selling the Chevelle SS-396 '67, including some guy wanting to trade for a GTX...and a couple of folks with really lowball offers. Those dolts are pretty easy to handle... Cars from the $4,500 to $65,000 range...

Maybe if I had a six-digit car I wanted to sell I'd consider an auction...

I agree.
Some thoughts on this:

1. Apart from any entertainment value the best reason to recommend selling at an auction is the money in the room. If there is money in the room for your type of car, than a auction can be the best place to sell simply because...the money is in the room and not on the west coast, not while someone arranges inspections, financing, shipping, or impromptu revisions to divorce decrees and especially without the time to think it over.

**2. Auctions are the best place to sell a good looking car of popular subject matter that isn't pedigreed or is without its original motor, or transmission or God forbid, it's born-with instrument lamp bulbs. Auctions afford buyers limited due diligence and that which might give pause to the buyer in your driveway will likely slip by an auction buyer.

3. It is a rare occasion when even auction veterans like myself sneak up on a car. It has never happened to me and I've never seen it happen. I bought my L78 at an auction for the then going rate, certainly no deal, but I was not after a bargain. I wanted the best Corvette I could find and the one I bought spoke to me. If you know what you are looking at and like it, an auction is as good a place as any to buy. If you are buying to enjoy, what does overpaying matter? I'm not talking about paying $100,000 for a $50,000 car but if something out there would give you serious wood and maybe the hammer comes down $5,000 or $10,000 more than you thought it should, so what?

** I do not advocate seller misrepresentation. Cars without history or original components will often sell for more at auction.

Dan

Think of the lowest number you would sell your car for. Add 10% and use that as your reserve. If it doesn't sell your out $575. If it sells at your reserve you got what you wanted. If it goes over your reserve just more money for you. Simple way to try it. Drive it up to West Palm and give it a shot. In the meantime put it on the Forum cars for sale and see what happens.

A clarification: I thank all of you for chiming in this post. My intentions are to have a good discussion with other great members of this superb forum so that we all can benefit and when and if we are going to sell a car we know the best way to do it that fits our individual needs best.

I was really enthusiastic to sell my car in the Fort Lauderdale Auction until I carefully analyzed the contract terms. I have attended that auction before and I was surprised as to how many cars did not sell. As I mentioned before I changed my mind and I am not selling the car. However, I am still interested to know what is the best way to sell our collectibles in case I change my mind in the future.
So far if I was going to sell one of my two cars (hypothetically) I will definitely post it in this forum if it is the Vette and Rennlist forum if it is the Porsche. Also I would advertise it in Hemming's Classic cars. Then if it does not sell via this way then I would consider the auction as last resource.
RJ1
Here are my thoughts on your comments. I know that other members are not comfortable to include the buyers premium but it is part of the equation.

Let us say, for discussion sake, that Hagerty for car X in #2 condition says is worth $60,000. You have that X car in #2 maybe #2+ condition. So I say Ok I want to realize a net sale prize of $57,000. So you add the 10% and you end up with $62,700 drop hammer cost. The buyer, however, will have to pay $62,700 plus 8% or $67,716 for the car. That is much higher prize than what the car is selling in the market. I think you will be hard pressed to find someone that will pay you almost $8,000 more than the market value. I think that is what happens and why so many cars do not sell in auctions.
Frankie
I bought my 1997 Porsche 911 with 39,000 original miles in Ebay bidding eight years ago. It is in immaculate conditions. My Corvette I bought it in 2017 from an ad in Hemmings Motor News. It was located in Flagler Beach Fl about 4 hours from Miami. Kind of a barn find. Had been in the owner's open garage idle for five years. It took me a year and months to restore it.

If a selller could dump his 50k car in one day and drop it 5k I think hes doing pretty good.
If he sold in traditional manners will he ever get full pop? Doubtful, and how much time would he waste doing it?
Makes sense to me...excpet the no reserve part unless the sellers life said "fire sale time".

Now from a buying standpoint, no way. Not enough time to get a feel for what you are buying.