How to Sell Your Classic Car at an Auction
Last week, we tackled buying a car at auction, but for someone to buy, someone also needs to sell.
This second part details how one can go about selling their collector car at auction. Selling at an auction can be much easier than you might expect, and it doesn’t necessarily have to be all about losing a vehicular member of your household.
Again, we have two auction house experts, Drew Alcazar, CEO of Russo & Steele, and Alain Squindo, Vice President at RM Sotheby’s, at our disposal to help answer the important questions.
Some important items to start with. First, with the proceeds from a sale, you could certainly purchase another car at auction—it happens all the time. Second, you can (obviously) only sell cars for which you are the legal owner. To ensure this, in almost all cases, you may be required to prove ownership, and you must have a clear title with no liens.
Why should I sell my car at auction? Aren’t there a lot of fees involved?
The reasons to sell your car at auction are largely the same reasons that make buying a car at auction attractive. While there certainly are fees involved, including a seller’s commission and often times an entry fee, Alcazar says “You have the best, most thoroughly pre-qualified buyers, other great cars on offer as well as dramatically extended marketing far beyond what any individual can do on their own. All of this brings more money and more people from much larger geographical radius looking for a car like yours into the room.”
Squindo adds that companies like RM also, “provide a concierge level of service, working with the seller to determine market value, set a reserve price if you so choose, make suggestions on how to prepare the car for auction, and develop a targeted marketing plan to maximize exposure and bidder interest. The result is often a higher hammer price and a much more exciting and seamless overall experience for the seller.”
Which auction should I sell my car at?
This depends greatly on what you have to sell and what you are trying to accomplish with it. The area of the country, the season, and the current characteristics of the market can all dramatically impact the final selling price. In a nutshell, and I’ll repeat this mantra again, do your homework. In this case, research auctions that have sold your type of car in the past. That’s a great starting point.
How do I get my car(s) to your auction?
Well, they’re not going to drive there on their own, are they? If you live nearby, it could be feasible for you and your car to have one last drive together, but it is the seller’s responsibility to get their vehicles to the auction site. Many of the auction companies have favorable arrangements in place with the major transportation companies though.
Should I go with the auction house that promises the highest sale value?
“Promises? Wow, that sends off alarm bells already! How can any auction house promise sales results unless it is participating somehow with the buyer?” says Alcazar.” “Anyone can tell you that your car is worth a particular value, but it will be the laws of supply and demand that actually determine its value on the day of the auction.” Squindo says, “It is important to consider that company’s track record for the sale of comparable marques and models at a comparable price point”.
Our advice? Do your homework – research the prospective auction companies sales data, and especially that with your type of car to see if they’d be a good fit, and remember, promises are just that…and made to be broken.
What happens if my car doesn’t hit reserve? Will it be “tainted” for future sales?
This scenario could happen if you set your reserve unrealistically. While you have the option of setting a reserve bid, keep in mind that this can sometimes hurt or limit your pool of potential bidders. Some bidders are turned off by reserve bids and avoid items that have a reserve. Or if the auction you picked was the wrong venue to sell your car, or there weren’t at least two people that really had to have it, driving the price up.
If you have a notable classic car, yes, the “no sale” will certainly be analyzed by the collector car community on the forums, but it won’t be tainted. You can try to sell your car another day, or at a different auction and perhaps you’ll realize a better result. The auction companies are also vested in a deal coming together, and often a deal is negotiated between the seller and a buyer by the auction companies post-block.
Sometimes, a reserve you may have set might be questioned by the auctioneer as bidding is taking place, and lifting that reserve may lead to a faster sale. In the past, however, sometimes in multi-day auctions car dealers would buy you vehicle as the reserve is lifted, buy your car at a discount…and then enter it into the auction on the next day in order to (potentially) sell it at a higher amount to a larger audience. Ultimately, it’s your call: if you feel as though you’re close to a sale and close to your reserve, feel free to lift it in order to encourage a sale. But don’t be pressured into lifting a reserve that would allow your vehicle to sell at a price less than you feel it’s worth.
How is the appraisal of my car completed?
For the purposes of selling your car at auction, auction staff consider vehicle histories, conditions, options and current market demand. With that data, as well as recent auction results, they are able come up with an estimate of how much they believe your vehicle may be worth. The more important the car, the more important the research is.
Vehicles identified as having “matching numbers” or other stated facts may have additional seller requirements. What’s that about?
Did I mention do your homework? Yes, well, I’ll say it again. Do your homework. Sellers are required by contract with the auction house to provide accurate information about a vehicle they are selling. Alcazar says that, “the responsibility of disclosure is 100% that of the seller. The responsibility of discovery is 100% that of the buyer.”
While more ambiguous statements like “fully restored” may not be as clear, saying that a vehicle is “matching numbers” when you’re not sure is clear-cut. It either it is or it isn’t. There isn’t a grey area. It is up to you to verify the details you wish the buyer to know when making a purchasing decision. Failure to do so isn’t an excuse.
How do they determine the position or time in which a car is run at the auction?
Everybody wants their car to run (i.e. be auctioned off) during prime time. It’s the best time of the day and when the most eyeballs will be on the car. Some auction houses make it a practice to sell lot numbers to consignors. For a fee, you can step up, pick your lucky number, and they’ll sell it to you. That’s may be fine for you, but it might hurt your chances of reaping the most money for your classic, and both RM and Russo & Steele don’t do this.
Here’s why: the goal is to create a consistent flow for the auctioneer as well as maintain a pace and diverse mix of vehicles that will keep the bidders interested and engaged from start to finish. Offering a $25,000 car in a group of $150,000 cars (or the other way around) makes little sense. Buyers assembled to bid on cars priced in six figures will rarely be interested in a $25,000 car. Similarly, offering a $150,000 vehicle to buyers with a price ceiling of $30,000 is a waste of time. Why? The right buyer for your car won’t be there. Instead, both Alcazar and Squindo favor a lot order that is determined using several criteria including but not limited to price point, a particular car’s position within a group consignment (i.e. a collection), or its status as a feature lot.
What kind of car can I sell?
Usually not your Honda Accord daily driver. There are other types of auctions for that. But auctions like Russo & Steele, RM, and others I’ve named earlier would love to hear from you if you have anything from a “Brass Era” or pre-war coachbuilt classic, to important and historic sports and racing cars, through to modern supercars and emerging collectibles. In the words of Alcazar, “If it’s something cool, let’s get it sold, sold, sold!”
Remember that part of the excitement of an auction is the feeling that anything can happen. Bidding can escalate quickly—but then again, your car may receive few or no bids. While we can offer some insight into selling your car by a classic car auction house, each auction is unique. Go into the experience with your eyes open, present your car as well as you can and you have a fighting chance of getting the maximum number of dollars for your classic. Even better, you can now watch auctions on TV or online, allowing you to familiarize yourself with the experience before making a decision.
Petrolicious thanks Drew Alcazar and Alain Squindo for answering all our questions.
Image Sources: Russo and Steele