18 September 2015

The Great Auburn Debacle of ’15: An exercise in humility and the unpredictability of markets

I blame the airline. Yeah, that’s it. It was the airline, which lost my bag at O’Hare for a day. I tweeted them about it (#grrrr!), because they had me shopping at a lonely do-it-all grocery store at midnight for undies and $3 polos. I accidentally left the deodorant on the bagging table, but I couldn’t muster the energy to head back over there at 1 a.m. So I lost $3.99 on that, which, in retrospect, was another early sign that failure was afoot.

Plus, I smelled bad.

You know how disorienting all of that is, right? Ruins your whole trip.

I need to blame something, because all I wanted from that trip in early September — the only thing I wanted, in my gut — was to sell a car with Auctions America at Fall Auburn and do well on it. Not just “OK,” but “well.” Secretly, maybe even “very well.”

And I did sell it, eventually, lot 3025, the Signal Red 1973 Mercedes-Benz 450SL — 98,000 original miles, two tops, great paint, clean MB Tex interior, Becker Europa II stereo, recent service on a 4.5-liter V-8 with plenty of smooth power to give. The only real knock I could see was some surface rust on the driver’s side door sill. Offered at no reserve, it crossed the block right around lunchtime on the auction’s second day, Friday. I watched it cross the block with my own eyes, and in my own clothes, even, though I’m not expecting my bag fee back from the airline anytime soon (#refund?).

What I’m getting at here is that the whole thing went south, real fast. Quick as a gavel, in fact. SOLD!

For the bargain basement price of just $3,200. Oh, hey, I just lost $1,800 on a $5,000 Mercedes I bought in July. I’d fire me.

# # #

Full disclosure, Hagerty Insurance is a sponsor of the Auctions America Fall Auburn sale. But my being there with a Mercedes to sell had nothing to do with the sponsorship and everything to do with making a sweet video about buying cheap classics on Craigslist and then selling them at auction.

I was not alone in this foolish endeavor, either. I had two accomplices, each of us having scoured Craigslist with $5,000 to spend on a classic to consign to Auburn, each of us confident that our classic would hammer sold for the most money. Each of us vying for bragging rights, and each of us expecting to make a profit.

So the Friday noon hour arrived at Fall Auburn, broadcast live in glorious HD on auctionsamerica.com for all of the world to see. For all of our Hagerty coworkers to see. For all of the bosses to see.

Here’s my best stab at a Bronx Cheer: Blprprprprprppp! Here you could also substitute the loser sound from “The Price is Right.” Any and all sound effects that convey failure are appropriate now.

And I wasn’t even the biggest loser, either, which I can assure you was not the sweet video we were trying to produce. Nobody goes to an auction trying to lose 36 percent on a five-week investment. Or even twice as much, like my sad friend Matt did on his Chrysler’s TC by Maserati. Meanwhile, my happy friend Brad made $700 on a 1963 Corvair Monza convertible, so good for you, Brad, on your Pyrrhic victory.

I don’t think I was out of line to think the Mercedes could have done well on the auction block. By all accounts, the R107 SL, built from 1973 to 1989, is an attractive, well-engineered European roadster. Yes, a gazillion of them were made in the car’s 18-year production span, but only the ’73 sports elegant, small chrome bumpers. Forever after, they were all furnished with excessively clumsy 5-mph “safety” bumpers. I had purity of form on my side, or something.

No one else thought I was out of line, either. Before I actually bought the thing, I consulted experts. Real ones who follow the market for old cars, guys who know it inside and out and understand what’s on the rise, and why. I checked three different valuation guides, including Hagerty’s own. Not one of them lists a low price lower than $10,000 — which, you’ll recall, is twice what I paid for my Mercedes, a garage-kept car I rated as a “very good driver.”

Before I forked over the cash, I even checked the Auctions America website, and at that point, just one other SL had been consigned. I saw dollar signs. I envisioned profit and charitable donations from my excesses. I made bold predictions to anyone and everyone who’d listen about my surefire bet, my rock-solid investment. What could possibly go wrong?

Everything, apparently.

# # #

It is hot in Auburn, Ind., sticky. I knew that before ever setting foot in the place, because I grew up in the Midwest. I know how the late summer unfolds in corn country. What I didn’t know, however, and what I quickly learned as I sweated my way among the nearly 1,000 consignments for Fall Auburn, is that another 10 R107s had been consigned to the auction in the weeks between my purchase and auction day. Twelve in all, with eight 450s, including another example from 1973. Lots of choices then, but buyers want options, right? Still, my ’73 appeared to be in better overall condition than the other ’73. Better paint, better interior, nicer top. I wouldn’t say my confidence took a nosedive, but I recognized that perhaps my SL wasn’t as “standout” as I’d hoped it would be.

Undoubtedly, there are plenty among you who are exceedingly pleased by all of this and feel that I got what I deserved. That classic cars are for driving and enjoying and not to be used as investments. That it’s guys like me who are driving up the prices of the cars you love. And I’ll allow that, because I mostly agree. I’d much rather own a car long term to drive and cherish and share with friends and loved ones than to have one simply as a “flipper.” Clearly, I’m terrible at it.

But collector car auctions, like any auction for any commodity, help to set the market for the objects we love. I simply wanted to test that market with what I considered to be a winner. Just as Matt did with his, um, Chrysler’s TC by Maserati, and Brad his Corvair.

And what I learned, in the hardest, gut-wrenchingest way possible, is that there is no surefire bet. Nothing turns “rock-solid” into quick sand faster than bidders who don’t love your car as much as you do. There’s no guarantee that your SL isn’t going to be one of a dozen to choose from. More importantly, as it applied directly to my situation on auction day, that it isn’t going to be the fourth 450SL offered before noon on Friday. Buyers had choices, and perhaps the savviest among them spotted something I hadn’t. Perhaps small bumpers mattered less than a fresh repaint, as was the case with lot 3021, a ’79 that proceeded my own car by just four lots. It sold for $9,600.

Or, heck, maybe it really was the airline. That seems the easiest explanation, anyway. Though, to be perfectly honest, as the bidding stalled and the hammer fell at $3,200 on my $5,000 Mercedes, I wished they’d lost me in Chicago, too.

You can watch all of my pride, pain and suffering in HD at https://www.youtube.com/watch?v=5Ufb-YAbskQ.

16 Reader Comments

  • 1
    Harris #mannytranny San Francisco September 23, 2015 at 15:36
    Did your $5000 budget include all the fees and taxes and 5 weeks insurance to register and establish clean title in your name?
  • 2
    Tony Merrillville, Indiana September 23, 2015 at 17:55
    Never, never put anything into an auction without placing a reserve price on it. In the example of the Mercedes, the reserve price should have been $7000. If no body bids the least you lose are the auction fees.
  • 3
    Fred Engle florida September 23, 2015 at 19:17
    Auction is a poor place to decide the value of a car. It is worth what someone is willing to pay at that time and place. The next auction could bring much more, or less. Mecum would have been a better place as they have more warm bodies than where you were.
  • 4
    John Colorado September 23, 2015 at 19:57
    More about the other cars. Lot's more. Three cars, three pictures a poor loser story 90% about one car. Covairs are cool, Chrysler’s TC by Maserati always fun to hear about that mishap, so much history yet whining about the Mercedes..yawn. BTW rust sucks, like rats, you see one, there are a lot more.
  • 5
    John Espinosa Hollister, CA September 23, 2015 at 20:00
    I liked the challenge these guys had, it made for a good story. The three guys have like-able personalities and that helped too. The problem is these guys were looking for a good deal in hopes of making a good deal at Auburn. That's difficult to do unless you find a car that is either unique and truly a classic or you find a regular car really, really cheap. The Corvair fit the first criteria because it is a classic, the other two cars...well nothing special, at least to classic car enthusiasts. Nice show though I enjoyed it.
  • 6
    robert sw america September 23, 2015 at 21:42
    Sorry to see this happen bro. It kind of like when you put a car up for sale and in the end, when you sell it for less than what you thought it was worth, its quite deflating. I am restomding a 68 Impala SS and have been thinking what could it bring at auction once it is finished. With a no-reserve, you are rolling the dice and sometimes need to brace yourself that you may lose your azz. Better fortune next time.
  • 7
    R.J. Russell Johnstown PA September 23, 2015 at 22:01
    I have always had reservation about the wisdom of selling anything at auction. The auction company gets paid whether the seller gets anywhere near his expected price. This concern goes double for no reserve auctions. A slow,crowd, a quick gavel or any number of other issues can ruin your day. I would be reluctant to offer anything I valued at a no reserve auction.
  • 8
    Howard Ontario September 23, 2015 at 23:23
    I found interest in reading about your venture to sell a Mercedes roadster. These are not true collector automobiles, as they are not in demand, in the same way that an old Mustang is. What disturbs me is the way that American classic auctions pad the available cars, with cars that are strictly for display. They use these autos to tease the viewing public, and, let's be honest; there are people out there that truly believe that you can pay $500,000 for a Cuda, without any documentation; one that has possibly been rebuilt from parts. Barrett Jackson has a wonderful television production. Unfortunately, there are a lot of gullible viewers that believe what they are watching. Barrett-Jackson is similar to The Beckett Sports Guides. Of course, if they don't promote the pricing, then the collector car market will revert back to where it should be.
  • 9
    Gary Anderson Los Altos, CA September 23, 2015 at 23:38
    Hey, don't feel bad. I've seen Wayne Carini get stung at Auctions America in exactly the same way, just at levels 10 times your buy and sell prices.
  • 10
    John Tad Sac Ca. September 23, 2015 at 23:57
    Were there auction fees or other expenses that Brad had to pay? {Travel expenses, lodging his time] What was his true bottom line?
  • 11
    Cal King Calgary / Mesa September 24, 2015 at 13:07
    I have bought several low dollar cars $10k or less, just because of their interest to me when I was younger or they seemed to be a rocking deal. Over the last 5 years, say one per year, I still have a couple. The others have come and gone, some with a small profit, some with a small loss. The first thing I do is assess what needs to be done and obsess with it for a few days or weeks. Drive them until the thrill wears off then let them sit and eventually sell them. I don't have the nerve to sell at auction but may look into in the future for some of my more iconic cars. I have seen the disappointment in sold prices from auction sellers and have got some smoking deals buying at auction. Reserves are costly in time and effort delivering the cars and jumping through all the hoops, but I think the auction houses want to make a deal to get both sides of the sale rather than just get your drive over the block fee. The reserve price on cheaper cars can be different at different auctions, read the fine print. Also some can come after the commission after the auction if you sell privately, read the fine print. But reserve also can be worth it if you are realistic in pricing as it will sit in the after stage lot if it doesn't sell. Quite a bit of exposure to real car guys.
  • 12
    Chris Washington State September 24, 2015 at 13:37
    I loved the article and the video. Sad the cars didn't sell for what was expected, but the article was great and well-written, and the video a lot of fun. The license-plate frame on my '72 Pantera reads, "It's not a toy; it's an investment." I had it made for the car and it is clearly tongue-in-cheek In fact, I'm in the process of spending way more than the car will be worth getting until-now-undetected rust repaired. Why would I do such a silly thing? Because I love my Pantera, have many great memories with it, and am never going to sell it!
  • 13
    T Jared Santa Barbara September 24, 2015 at 14:39
    Since I am the proud custodian of my grandfather's 73 "signal red" 450SL (just passed 200,000 miles!), the right side of the page on which this article and video appeared included the results from my most recent Hagerty Value Your Vehicle request. And I quote: "THE AVERAGE VALUE FOR A 1973 Mercedes-Benz 450SL 2dr Roadster 8-cyl. 4520cc/190hp Bosch FI: $23,788. Value data provided by Hagerty Valuation Tools®. I love irony.
  • 14
    Niko WA September 24, 2015 at 12:33
    IMHO auction is NOT a good place to sell a medium or low interest car, and is only sometimes good for a hi value, hi interest, car. Often the auction staff pushes the seller to lift the reserve below good market price..te seller reluctantly agrees to not have to take the car home..and bang..the hammer drops at that same price. It takes a great and rare and sought after car to get two private owner bidders to compete. Dealers will drop out at low bids.
  • 15
    Charles Lamb Oregon September 24, 2015 at 00:47
    Not the car, the position in the lineup was your problem. If you had been the first 450 SL you would have hit it big.
  • 16
    Larry Carlson Michigan City, Indiana September 27, 2015 at 21:57
    Why should anyone feel sorry for you? You did not lose a cent. You were playing with Hagerty's money. You had no skin in the game. By definition you could not lose. Do it with your own money and we will take an interest.

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