The pros and cons of selling at auction
Classic car auctions get a huge amount of media attention and the general assumption seems to be that it’s the most common way for people to sell a classic car. In fact, auction sales make up only about 3% of sales (by volume, not dollars) and there are very definite pros and cons to selling via auction. Here are some of the most notable:
PROS
Auction Companies Generally do an Excellent Job of Marketing: Auction companies, particularly the high-end ones that conduct catalog sales, spend a tremendous amount of time and money publicizing their sales, and photographing, researching and describing cars. The costs of printing and mailing catalogs are astronomical. Disappointing results at auction are rarely the result of lack of marketing on behalf of the auction company.
Auction Companies Take Care of the Messy Stuff: In private sales, the responsibility for dealing with issues of title and payment fall on the shoulders of the seller. Auction companies deal with the business side of things for the seller and in doing so, provide a valuable service.
Auction Companies Bring Qualified Buyers to the Table: Auctions have been around for thousands of years and the basic concept has not changed—assemble as much quality merchandise as possible in a small geographic area and pack as many ready, willing and able registered bidders into said space as the fire marshal will allow. It’s a winning formula when done properly.
CONS
You Can’t Choose Your Spot: The difference between prime time (a middle lot on a Saturday) and or the last one on a Sunday after the room has cleared out is immense. In addition, you don’t necessarily want your vehicle lumped in with multiple examples of the same model. In general, the auction company sets the lineup, and unless the seller has a ton of clout, he or she doesn’t get a say.
Shipping Costs Add Up: You have to get your car to the auction and for most sellers, that means shipping it. For East Coasters consigning a car at Pebble Beach, it can amount to almost $3,000. And if your car doesn’t sell, it’s another 3 grand to get it home.
Risk: Some auction companies don’t allow you to set a reserve (the minimum amount you’ll take) if your car is under a certain price. This means that the highest bid over the block owns the car, no matter how far below the pre-sale estimate the bid is. For some people, it’s simply too low.
