Where do live auctions fit in the marketplace of classic/exotic cars?

[sugarwood]

I was at Monterrey this week and attended a live auction. The "speaking in tongues" gibbering was annoying as hell, and I wore earplugs like a proper middle-aged crank.
But, it was a real fun time to see cars staged and then pass through the block.

I am curious where these things fit in the marketplace landscape of Ebay, forum classifieds, exotics dealers, CL, Autotrader, etc.
It seems very different than targeting a car and buying directly from a dealer/seller. If you want to buy a certain car, why not just find one directly?

What is the profile of the typical live auction buyer ?
Does a buyer come into town open to the idea of buying anything?
Kid in a candy store? Or pro investors? Hedge fund scouts?

What is the advantage for a seller to use a live auction to sell his car? The cost to a seller is $2000 to ship, hotels, airfare, and 10% to the house.
What is the advantage over using Ebay to market and then do a private deal? Or consign to a regional dealer who markets well?
Seems like a lot of hassle to only be able to sell a car to a few people in attendance. Would you use a live auction if you need a quick sale?

What if a seller wanted to maximize the selling price of his GullWing 300SL and was ok with marketing the car for a year, if needed? Would he still use a live auction?
Private party seems to allow selling to anyone on the planet, not just a few 100 people in attendance in a very specific part of the planet.

Do private party sales or live auctions pull the highest prices?
Is there a "realtor" effect for high dollar sales?
Do buyers feel there is a value added vetting process? Legal backup in case of fraud?
It does seem odd to hand over $1 million for a Gullwing in someone's driveway.

Lastly, prices for regular cars did not seem crazy. In fact, it seemed like some good deals were to be bad (or no reserve met)
Of course, it totally depends on the car, but it was far from the "Neiman Marcus" vibe I was expecting.
Lots of decent looking 60's muscle was selling for $25k, which is hardly "Saks 5th Ave." pricing.

[stomachmonkey]

There are a couple of things going on.

Mostly, dick swinging, by both buyer and seller.

[KNS]

I can't stand the US style auctioneer blather - like you're at the county fair. Seems even more out of place when a Ferrari is crossing the block.

When I'm watching an auction on TV my wife pleads with me to turn it down as it gives her a headache. Strange as she grew up in Iowa with plenty of county fairs (the British auctioneers she has no problem with).

[ckelly78z]

Originally Posted by stomachmonkey

There are a couple of things going on.

Mostly, dick swinging, by both buyer and seller.

Yea, I have a pretty low opinion of most of the car auctions. I don't think any real car guy goes to the auction to buy anything without first considering what his friends (and neigbors watching on TV) think of his dick swinging.

You have to be somewhat of a gambler to sell a car there, and somewhat of a player to buy the cars.

[sugarwood]

I tried to imagine myself a real bidder during that chattering. Instead of inducing panic to bid, it just made me shut down since I could not think. I think it has the opposite effect of inducing confusion. When I am confused, I back away, not spring into action. Maybe being drunk is a prerequisite for it to work.

I also felt the auctioneers were suited up rednecks. It was clear they barely knew the cars and were coming off as a generic flipper ad verbiage. "Low miles!!" Nothing overly specific about any car.

[rcooled]

Originally Posted by sugarwood

If you want to buy a certain car, why not just find one directly?

Most people do...only about 10% of all classic car buy/sell transactions take place at auctions. Many of the high-profile car auctions have become more of an entertainment spectacle than a place to conduct business. As mentioned before, there's a lot of dick swinging, free drinks, and even a chance for participants to get some face time on TV. Mecum seems to cater to this type of clientele. Their format is more like a 3-ring circus than a serious car-buying venue. Harsh lighting in the tent and gaudy signs hanging everywhere; the auctioneer blabbing nonsense at warp speed; the bidder "assistants" yelling at the top of their lungs while prodding bidders to up their bid; the crowd on stage milling around the car being sold; and the ever-present TV cameras being stuck in the bidder's face.
Contrast this with a Gooding auction. They feature carefully designed lighting to highlight the features of the car being offered for sale; an auctioneer who speaks in plain English and encourages bidders with a sense of humor rather than screaming at them; a second official on stage providing factual information about the car, and in some cases, a first-hand driving impression; no gaggle of on-lookers hanging all over the cars on stage...the car itself is the main attraction; and no on-camera time for bidders or people in the crowd. Again, it's all about the cars here.

Originally Posted by sugarwood

What is the advantage for a seller to use a live auction to sell his car?

Well, you may just luck out and have two inebriated bidders with deep pockets engage in a pissing contest over your car. Case in point: A vintage VW bus sold for an incredible $235K at auction in 2014. If it's a quick sale you're after, you can offer your car at no reserve and be pretty sure that it'll sell. The big risk here is that you may wind up with a much lower price than you expected.

Originally Posted by sugarwood

It does seem odd to hand over $1 million for a Gullwing in someone's driveway

I would think that most transactions in this price range are handled thru a broker or other third party. Unless you know the seller personally, or both of you happen to run in the same social circle.

[Brian 162]

If you add alcohol, tv cameras, and 2-3 bidders wanting the same car, then dick swinging takes over and said car goes for a ridiculous amount.
Just sayin

[sugarwood]

I am assuming televised auctions are a negligible sliver of the entire auction market.
Sort of like house flipper TV shows vs. the entire USA real estate market

[RKDinOKC]

If buying at an auction.

Study the car, the auction itself is not to provide information on the car, only to accept bids to sell it.
The auction house should provide a guide for the cars being sold with lots of info.
The cars are on display to inspect if interested.
Fix a price you are willing to give for the car.
Remember the auction itself gets paid a fee over the auction price of the car.
Do not go over the price you established to pay before the actual auction.

If it doesn't meet the reserve and is still under what you were willing to pay, go talk to them. It ain't over just because it didn't sell while the auctioneer was hocking it.

[rcooled]

Originally Posted by sugarwood

I am assuming televised auctions are a negligible sliver of the entire auction market.
Sort of like house flipper TV shows vs. the entire USA real estate market

This is a correct assumption. As I said in my earlier post, auctions account for only about 10% of classic car transactions.

[sugarwood]

That's not what I said. Read my first sentence again.

[RacerX1166]

I think the auction landscape has changed quite a bit, now that the two bigger ones are televised with seemingly large audiences. I recall when I first saw Mecum on TV. More bare bones affair. Prices were closer to wholesale and most of the buyers seemed to be dealers, with 4-5 of them grabbing a good chunk of the nicer cars. This applied to BJ as well.
TV coverage has broadened the audience and brought out the folks who are buying for themselves. And the show has been adapted to be appealing to that target market to the point where I don't see any of the dealers who were fixtures at earlier Mecum events.

[berettafan]

auctions facilitate efficient moving of used cars. get 'em in, get 'em out. this helps the new car industry.

classic/collectible cars have no need for this facilitation.

my personal opinion of auctioneers is pretty low. I've watched all manner of shady stuff at various auctions. generally if you don't know who the boob is, it's you.

[Tobra]

Originally Posted by sugarwood

That's not what I said. Read my first sentence again.

Actually, yes it is what you said. He quoted you.

[sugarwood]

Originally Posted by Tobra

Actually, yes it is what you said. He quoted you.

This is what I said: I am assuming televised auctions are a negligible sliver of the entire auction market.
I am saying that TELEVISED auctions are a tiny slice of the AUCTION market, NOT a tiny slice the ENTIRE classic car market.

He then replied with, As I said in my earlier post, auctions account for only about 10% of classic car transactions.
He is saying that AUCTIONS are a small part of the classic car market, NOT the entire AUCTION market.
While a true statement, that was not the point. My point was that TV auctions do not represent the majority of real untelevised auctions, so you can not throw the baby out with the bathwater by saying only publicity hounds buy at auctions, when TELEVISED auctions are a tiny slice of the auction market. ie: What is the reason to buy at a UNTELEVISED auction?

[rcooled]

Originally Posted by sugarwood

What is the reason to buy at a UNTELEVISED auction?

One reason is that maybe you're in the market for a collector car but not really sure exactly what to buy. Maybe you're just coming into the hobby and really don't have a good feel for the 'in-the-flesh' look & feel of all the different types of cars out there. Photos and descriptions online and in magazines can only convey just so much about a car. An auction (televised or not) will give a prospective buyer a chance to see a wide variety of collector cars up close & personal and might help them make a decision on what to buy.

[recycled sixtie]

An auction with an audience is the first place I would use to blow out a POS Vintage(old) car. I used to have a Volvo P1800( 1968 I think) and bought it not knowing it was filled with bondo. Not willing to sell it privately and face the buyer I went the auction route.

Things started falling apart when the auctioneer asked me to say something about the car in front of about 100 people. I cannot remember what I said because somebody bought that rustbucket anyway...

I never did look into the eyes of the buyer. I took my cheque and ran to the bank.....
Oh yes, buyer beware.

[sugarwood]

No auction speak here
https://www.youtube.com/watch?v=iF3O5XtZ0W0