Expert tips for selling your car at auction
We’ve all seen the big auctions on TV. The scene is often the same: a car rolls on to the block, the auction commentator gives a 20-second spiel likening it to the best thing since indoor plumbing, and shortly thereafter a room of eager bidders attack it like a wolverine taking down a moose. And then, in four minutes or less, the auctioneer drops his gavel with ear-shattering authority and shouts out “SOLD!!” Just like that another world record is set, and the camera crew cuts to an elated seller and an overjoyed winning bidder. High fives all around.
How could you not want to be a part of this, especially when it is time to sell your own car? It sure does look a lot more appealing than the traditional ways of listing your car for sale in print, online, or through word of mouth, and then fielding inquiries from tire kickers and picture collectors. Plus, the prospect of meeting up with a stranger can be uncomfortable for some. Not to mention the actual mechanics of doing the deal, should it come to that: how to confirm payment, how to properly transfer ownership, where you’ll store the car for an unknown amount of time while the buyer arranges shipping, plus the liability that comes with it all.
That’s why consigning your car to a live auction offers a lot of benefits. It will be presented to a tremendous mailing list prior to the sale, presented to a room full of potential buyers, and likely benefit from the spirit of competition among them. And if you really don’t know exactly what your car is worth, whatever happens on the block will likely give you that answer, at least as it pertains to that very moment in time. After the dust settles and the car sells, the auction handles the paperwork and you get a check.
Sounds tempting, right? But if you haven’t done it before, what can you really expect, and how does the process work? Well, as someone who has consigned hundreds of cars to auctions, allow me to walk you through the basic procedure—something that is fresh in my mind as I’ve just returned from the 2018 Mecum Spring Classic auction, where I consigned eight cars and ended up selling seven of them.
Find the right dance partner
The first step is to pick the right auction company and the right venue. For example, if you are selling an Alfa Romeo 8C 2300, I wouldn’t consign it to a small muscle car auction in North Carolina. I’d talk to the auctions that have sales in Monterey or Monaco.
Once you’ve determined the best fit for your car, then you should contact the auction houses to see if they will accept it and under what terms. Some may not want it at all if they don’t think it is a good fit, and others may only want it as a no-reserve lot based on its value or other factors. After all, the auctions know what sells, and they only have a limited number of run positions. It is their job to stock the pond with as many cars that will sell as possible.
The auction game is all about results. They don’t make money on entry fees and no-sales; it is all about earning commissions and maintaining sale percentages, which is crucial to gaining more consignments in the future.
Negotiate reserve price and run position
This selection process can be arduous even after the auction agrees to consign your car, because once they’ve agreed to sell it you must negotiate not only the reserve price, but also its run position, which is far more of an issue in a mega multi-day sale than a one- or two-day event. Run lists are carefully choreographed affairs, crafted to start slowly and draw bidders in with lower-priced cars selling early in the sale and ramping up into the “prime time” headlining sales, followed by a slow return to lower-priced cars to maintain sale momentum through the end of the auction as the crowd thins out.
The moral of the story is, you don’t want your car to sell too early, or too late. And if the sale runs Tuesday through Sunday, you ideally want to be on the schedule Thursday, Friday, or Saturday so you don’t miss the buyers who fly in on the second day and fly out on the last. Using my recent trip to Mecum as an example, all eight cars I sent were excellent examples of modestly priced-but-rare cars. They weren’t prime time Saturday merchandise, nor did I want them to be.
As I buyer I know that if I’m looking for a $25,000 car, I’m not looking at the Saturday run list, and I didn’t want my cars to fall victim to that. As a counterpoint, if you bring a car that is at the upper end of the value spectrum and it runs on an earlier auction day, it will become a prime time car on that day’s run list. So I decided to run six of my cars on Thursday, one on Friday, and one early Saturday, based on which cars I thought were the best fit based on genre and price. And for televised auctions like this one, I’d rather be in a “TV” spot on an earlier day than a non-broadcast spot on a later day. I don’t know what those TV cameras emit, but it sure seems like people like to get in front of them and bid. And that’s good for the seller.
As for reserve prices, this time was no different for me. I set my target net proceeds amount for each car and then add to that the cost of the entry fee and the seller’s commission I’ll have to pay the auction house. For example, if the desired net is $20,000 and the auction commission is 10 percent, shipping is $1,000, and the entry fee is $1,000, I’d have to set the reserve at $25,000. That leaves a net of $20,500, and a little room to negotiate that on the block if needed. We’ll get to that in a minute.
Good photos and description are vital
Now come the listing contracts and the important stuff: creating your description and photographing the car. Don’t underestimate the importance of these two things. Bidders will often decide they are interested in a car—or not—simply based on photos and the description, so make sure to do a good job with both.
Skip the hyperbole and historical narrative when writing about your car and offer real information: how many were made, how many people have owned it, the car’s history as you know it, and what is original and what isn’t. List supporting documentation for these claims, such as “factory build sheet” or “verified by XYZ expert with report available for review.” Don’t use ambiguous terms that unscrupulous sellers have adopted as buzz words, such as “numbers matching engine.” Instead, if it is the original engine, state “numbers matching original engine.” Bidders respond to facts, not fluff.
As for the photos, most auction companies will send out a professional photographer for higher-value consignments. If they don’t, take a look at other auction listings with good photos and create a shot list for your own car that will mimic the images. If all else fails, hire a photographer, or ask the auction company if you can hire theirs. Mecum, for example, will send one out for a small fee, and it is money well spent.
Details matter, and so does detailing
So, now you’ve battled through getting your car consigned, getting it placed in a good position, and setting your reserve. You’ve sent a good, factual description and have good photographs in place. Whether it is a catalog-style auction or not, make sure to carefully review the edited listing that the auction house will send for your approval. Again, as the old yarn goes, you won’t get a second chance to make a first impression with potential buyers.
Prior to shipping your car, make sure it is detailed well, has a fully charged, good battery, and has air in the tires and enough fresh fuel in the tank. Sounds like common sense, I know, but I’ve seen proof to the contrary again and again. I also find it helpful to make a couple of small binders with copies of all the documentation, restoration photos, history, and anything else that makes your car special. Leave one in the car come sale time, and hold the spare in case somebody swipes the first one. Presenting this type of documentation to buyers is key; it offers a level of comfort to buyers and also validates what your description states.
Now it goes without saying that you have to figure out how to get it to the sale, either by towing it yourself or having it shipped. Once the car arrives at the sale make sure it gets checked in properly and parked in the right spot, and then get to work cleaning it up again—and stay on top of this until it is on the block. An added benefit is when you are there with a bottle of detail spray wiping down your car, it offers buyers and opportunity to identify you and ask questions before the sale.
Set your minimum and stick to it—for now
Before your car hits the block, give serious thought to your minimum net proceeds. Remember that you have made a sizeable investment in getting the car to the sale already in time, entry fees, and shipping expense. You’ve traveled there and paid for a hotel room, as well. So be sensible. A no-sale means you’ll have all of those expenses plus the cost of shipping the car home again. Write down what your absolute bottom line is and memorize it. In my case, with the recent sale of multiple vehicles, I did this and also added them together for my aggregate bottom line.
Soon the moment of truth will arrive—the car will hit the auction block. At most sales you’ll be with it, and the auction will assign a “Seller’s Ambassador” to stand next to you. A more accurate and often-used description of this person is “The Grinder.” Their job is to get you to sell the car. Before the bidding even starts, they’ll look at a sheet that tells them what your reserve and net proceed numbers are. But they’ll pretend they don’t know this and ask, “What do you need for it today?” This is where that net number you wrote down comes in handy, because that is your answer. Stick to it, at least for the time being. Once the bidding gets going, if things go well that net number may not be a factor. But if the bidding is below that number, you’ll need to think about what you want to do.
In some cases the auction house will negotiate your selling commission, or even dip into the buyer’s commission to get the deal done and net you out. For example, if you have a $200,000 reserve with a 10-percent commission, your net per the contract is $180,000. If the high bid is sitting at $175,000, with a 10-percent buyer’s commission, the auction may decide to take the “all-in” offer of $192,500 and net you the $180,000, and cut their total commission to $12,500.
Of course, as with any business deal it often takes flexibility from both parties, and if the auction house is willing to work with you, it is always a sign of good faith to bend a little yourself. After all, they want the sale to happen as much as you do and have brought a buyer to the table. Remember that taking the car home helps nobody at this point.
It ain’t over til it’s over
Now, if for some reason a sale doesn’t occur on the block, don’t give up hope. All auctions work hard to try to put a deal together after the fact, especially while the vehicle is still at the auction and in their control. Case in point, of the seven cars I sold at Mecum, four sold on the block and three sold shortly thereafter through their “Bid Goes On” team.
In the end, if played right, consigning the right car to the right auction, properly and honestly presenting it, accompanying it to the sale to talk to any potential buyers, and setting a reasonable expectation of price are the keys to success in selling at auction. The potential downside is that you do all of this and fail, and then you have to resort to selling it another day. The upside is a relatively painless sale or better yet, actually realizing a sales price that exceeds your expectations. In my case, a few of the seven cars that I sold fell short of expectations, but in the end my aggregate net proceeds were within a few thousand dollars of the goal. And, I got to free up seven garage spaces in three days.
To me, that is the real benefit of sending cars to auction. Rather than weeks or months of hand-selling cars and doing the dance, you often have cash in hand within minutes of a car being on the block. And that is when being attacked by wolverines isn’t so bad after all.