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Bob Palma’s article about collector car auctions

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  • Bob Palma’s article about collector car auctions

    One of my favorite subjects, and well done. I have been doing business at car auctions for getting close to 50 years now, and I still love every minute. Well, not so much at everyday car auctions anymore, but I never get enough of collector car sales.

    I did take issue with one of the commenters. Without fail, somebody claims that auctions have ‘driven up’ values. That is, of course, incorrect. BUYERS drive up values, for a host of reasons, and that’s a discussion we can have… but all auctions do is offer a convenient venue to offer for sale, and to find and buy what you want.

    Anyway, here’s the link. I have to personally deliver a car to TN this weekend or I would be in Orlando at the Mecum auction. Instead I watch the live stream all day and take notes, and I’ll be listening to it the entire 1000 miles on the road. Always studying to do!

    https://www.hemmings.com/stories/202...ign=2021-07-28
    Proud NON-CASO

    I do not prize the word "cheap." It is not a badge of honor...it is a symbol of despair. ~ William McKinley

    If it is decreed that I should go down, then let me go down linked with the truth - let me die in the advocacy of what is just and right.- Lincoln

    GOD BLESS AMERICA

    Ephesians 6:10-17
    Romans 15:13
    Deuteronomy 31:6
    Proverbs 28:1

    Illegitimi non carborundum

  • #2
    Thanks for posting that! Great article Bob!
    Diesel loving, autocrossing, Coupe express loving, Grandpa Architect.

    Comment


    • #3
      Originally posted by Bob Andrews View Post
      I have been doing business at car auctions for getting close to 50 years now, and I still love every minute.
      At ten years of age you were buying and selling cars at auctions??!? That's how old (young) you were 50 years ago.

      Craig

      Comment


      • #4
        Tough crowd!
        Diesel loving, autocrossing, Coupe express loving, Grandpa Architect.

        Comment


        • #5
          Agree, auctions can be entertaining and even exciting. Since the first camel was auctioned off in the dusty village square thousands of years ago, both buyers and sellers come for the action.

          Auctions are definitely driving up the net cost to the buyer and sometimes driving down the net return to the seller.

          Bob can tell us at what point in time the 10-12% "buyer's premium" became a thing at major collector car auctions, but it wasn't charged back when. The seller has historically paid 8% commission to have his car sold at auction.

          One good/bad, depending on whether one is buying or selling, is the push to list cars at "no reserve". If one watches the first two or three days of a five-day major auction, one will see come cars being sold at bargain prices. On say a Thursday morning, the bidder's seats will be nearly empty and if a seller's no-reserve vehicle is run through then, it can be sold for a considerable loss, below market. That's the risk the seller takes by choosing an auction as opposed to the time and effort advertise the car widely and handle the sale personally.

          If one wants to bid, there are financial requirements. These folks are smart and there's a lot of losers out there who will get buyer's remorse and try to pull a fast one by leaving without paying. You have to give a guarantee that you'll pay, one method is to put up a "Bid Limit Deposit" of $9,000 via cash or certified check, (no personal checks), representing a $90,000 minimum bid limit. This is like paying 10% of the bond to bail someone out of jail.

          To sign up as a bidder in Palm Beach for example, it costs $200 just to register. They want copies of driver's license and proof of insurance and a recent photo to put on the bidder's paddle. Any additional guests are $100 each and must be registered, everyone must be named and credentialed.

          jack vines







          PackardV8

          Comment


          • #6
            Originally posted by 8E45E View Post

            At ten years of age you were buying and selling cars at auctions??!? That's how old (young) you were 50 years ago.

            Craig
            Tonka, Nylint, Hot Wheels, etc. made cars too!
            sigpic
            In the middle of MinneSTUDEa.

            Comment


            • #7
              Originally posted by 8E45E View Post

              At ten years of age you were buying and selling cars at auctions??!? That's how old (young) you were 50 years ago.

              Craig
              I started to attend and participate in dealer auctions in the 1950s. I didn't buy at an auction, on my own, until 1960 (auction at a dealership). I am old enough to be Bob A's father.
              Gary L.
              Wappinger, NY

              SDC member since 1968
              Studebaker enthusiast much longer

              Comment


              • #8
                Originally posted by studegary View Post

                I started to attend and participate in dealer auctions in the 1950s. I didn't buy at an auction, on my own, until 1960 (auction at a dealership). I am old enough to be Bob A's father.
                I started going to dealer-only auctions when I started working with dad in the garage at 8 years of age. By 12 I was doing service work, and running dad's backhoe when needed. I bought my first car at auction, with dad by my side, at Irv Mondore's Lafayette Auto Auction in 1973, at 12, hence the reason I said 'close' to 50 years. Before I had my driver's license, I was doing the majority of our auction buying and selling, although at that time most inventory still came from dad having personal relationships with multiple new car store owners. So many great memories of those guys and how they operated, and how dad could interact with them successfully (usually involving alcohol and cigars). Today, all of that has changed; most new car stores have been bought for their franchises, closed down, and their franchise combined at a new, much larger, multi-make facility, or group thereof. Instead of looking to offload their trade-ins, they are now keeping a large percentage of them to recon and retail, with the scraps going directly to auction with little to no direct wholesaling. Modern auctions have made it the most attractive way to liquidate: they pick them up, detail them, and offer volume discounts on fees. Yes, there are still a few connected wholesalers, but it has changed to the point that I no longer have interest in wading through rows of iron, in all weather conditions, 4 days or nights a week, hoping to find a decent piece. And I cannot get interested in high-risk online buying. So, I focus on what I love anyway, collector car auctions.

                I should have guessed that there would be at least one jealous pants-pisser that would jump on my saying 'nearly 50 years' instead of 48 years, 7 months, and 12 days. Sorry I achieved a lot at a young age .
                Proud NON-CASO

                I do not prize the word "cheap." It is not a badge of honor...it is a symbol of despair. ~ William McKinley

                If it is decreed that I should go down, then let me go down linked with the truth - let me die in the advocacy of what is just and right.- Lincoln

                GOD BLESS AMERICA

                Ephesians 6:10-17
                Romans 15:13
                Deuteronomy 31:6
                Proverbs 28:1

                Illegitimi non carborundum

                Comment


                • #9
                  Good one! Auctions are far from 'new' to me as I have attended truck & heavy equipment auctions besides car auctions in the 1960's with my dad and my uncle who sold construction equipment. It certainly isn't me who is jealous. I sold two cars at a collector car auction some 35 years ago, and did well on them. Their sale yielded a sizeable down payment which enabled me to purchase a nice house.

                  Craig

                  Comment


                  • #10
                    Originally posted by PackardV8 View Post

                    Auctions are definitely driving up the net cost to the buyer and sometimes driving down the net return to the seller.

                    Bob can tell us at what point in time the 10-12% "buyer's premium" became a thing at major collector car auctions, but it wasn't charged back when. The seller has historically paid 8% commission to have his car sold at auction.

                    One good/bad, depending on whether one is buying or selling, is the push to list cars at "no reserve". If one watches the first two or three days of a five-day major auction, one will see come cars being sold at bargain prices. On say a Thursday morning, the bidder's seats will be nearly empty and if a seller's no-reserve vehicle is run through then, it can be sold for a considerable loss, below market. That's the risk the seller takes by choosing an auction as opposed to the time and effort advertise the car widely and handle the sale personally.

                    If one wants to bid, there are financial requirements. These folks are smart and there's a lot of losers out there who will get buyer's remorse and try to pull a fast one by leaving without paying. You have to give a guarantee that you'll pay, one method is to put up a "Bid Limit Deposit" of $9,000 via cash or certified check, (no personal checks), representing a $90,000 minimum bid limit. This is like paying 10% of the bond to bail someone out of jail.

                    To sign up as a bidder in Palm Beach for example, it costs $200 just to register. They want copies of driver's license and proof of insurance and a recent photo to put on the bidder's paddle. Any additional guests are $100 each and must be registered, everyone must be named and credentialed.

                    jack vines
                    Collector car-specific auctions are a relatively new venue to me. Most of my life, collector car sales consisted of regular auctions designating one or two days a year promoting a separate lane for collector cars along with their regular sales; same as they do with RVs. I don't think I ever even attended a collector car auction, as we know them, until sometime after I retired from driving race cars full time in 2001. It wasn't hard, all the skills and experience I already had from a lifetime of regular auctions applied. Bidding/negotiating techniques are the same, most office procedures are the same; the only real difference is the inventory and mobility of locations. I still spend hours every day studying the market and auction run lists, just like I did all those years in the regular car business. One difference is what you touched on, the fees: most regular auctions charge a minimal entry fee, and sold fees are based on the range the sale price falls. As near as I can remember the buyer's/seller's fees have been around that 10% mark; some smaller auctions have chosen to charge a percentage to either the seller or buyer only. Some gripe about the cost of collector auction fees, but considering all that goes into putting on a sale like Mecum does, starting with huge venue rental and staff, I don't fault them. Of course, I have never let fees bother me- I simply know what they are and take them into consideration before I buy or sell.

                    Registration fees- as a licensed dealer, in most cases they are waived for me when I show my dealer-only Auction Access card. Mecum in particular is wonderful to me, they make sure I am a 'Gold Bidder', which the biggest perk is easy sign-in process. And I can sit up front in the auction ring LOL. But again, I don't give much thought to fees, the auctions need to make a living too. Even if I don't buy, I get a lot of value out of studying the cars, and the market, up close. And. I absolutely love being in that environment

                    In the end, I love the auction process. Sometimes I buy, sometimes I sell, but best of all they are a huge help with my main goal at this stage of my life: helping to connect great cars with those who seek them, but are intimidated, or just annoyed, with the process. I don't make much money, but I don't need to, and I'm doing what I love. Linda said how often do you lose money? I told her always, but I plan to make it up on volume
                    Proud NON-CASO

                    I do not prize the word "cheap." It is not a badge of honor...it is a symbol of despair. ~ William McKinley

                    If it is decreed that I should go down, then let me go down linked with the truth - let me die in the advocacy of what is just and right.- Lincoln

                    GOD BLESS AMERICA

                    Ephesians 6:10-17
                    Romans 15:13
                    Deuteronomy 31:6
                    Proverbs 28:1

                    Illegitimi non carborundum

                    Comment


                    • #11
                      Nice reply, Bob A. ( I don't want to take up space by quoting it here.)
                      I started to go to dealer auctions in the 1950s when I worked part time at used car dealership. This was usually up near Albany, NY.
                      The first all-collector car auction that I remember attending by myself was a Krause (sp?) auction in the early 1970s up in the Albany, NY area.
                      By the 1980s, I was attending dealer auctions on a weekly basis. These were usually the one in Connecticut (near Springfield, MA), Newburgh, NY or the one north of Syracuse, NY (up near Bob A). These auctions had multiple lanes running at the same time. Some were specific to a particular manufacturer for their dealerships. Sometimes there was a lane for collector/special interest vehicles.
                      Gary L.
                      Wappinger, NY

                      SDC member since 1968
                      Studebaker enthusiast much longer

                      Comment


                      • #12
                        Originally posted by studegary View Post
                        I started to go to dealer auctions in the 1950s when I worked part time at used car dealership. This was usually up near Albany, NY.
                        The first all-collector car auction that I remember attending by myself was a Krause (sp?) auction in the early 1970s up in the Albany, NY area.
                        By the 1980s, I was attending dealer auctions on a weekly basis. These were usually the one in Connecticut (near Springfield, MA), Newburgh, NY or the one north of Syracuse, NY (up near Bob A). These auctions had multiple lanes running at the same time. Some were specific to a particular manufacturer for their dealerships. Sometimes there was a lane for collector/special interest vehicles.
                        When you say Albany I bet that you are referring to the old Northway Auto Exchange on Rt. 416 in Clifton Park. I know that that one was there when I was a kid, and we used to go there on occasion. It's still in operation, now owned by Manheim. I still go every so often, mostly for old times' sake. The building still looks the same, but the way things are done sure has changed. The one north of Syracuse had to be Tri-State on Rt. 31 in Cicero, founded by the Meltzer family. I bought a car there on their opening day, in 1976. Today it is part of the Adesa empire.

                        A word about Kruse Auctions. They were probably the first collector-specific auctions I attended. Dean Kruse is a decent guy who put on a lot of small auctions and got to know repeat customers Unfortunately his finances got out of hand and the business collapsed, resulting in permanent loss of his auction license. No matter he made a fortune selling the business to eBay and then buying it back for a bargain price a few years later, before the thing crashed. Last I knew, he still owned a couple museums in Auburn, IN.
                        Proud NON-CASO

                        I do not prize the word "cheap." It is not a badge of honor...it is a symbol of despair. ~ William McKinley

                        If it is decreed that I should go down, then let me go down linked with the truth - let me die in the advocacy of what is just and right.- Lincoln

                        GOD BLESS AMERICA

                        Ephesians 6:10-17
                        Romans 15:13
                        Deuteronomy 31:6
                        Proverbs 28:1

                        Illegitimi non carborundum

                        Comment


                        • #13
                          Bob Palma's article helped me with something I had not considered until now. For the most part, most of my cars have been running parts cars that I have worked toward the goal of enjoying and looking decent to promote Studebaker's. That all has changed with my latest purchase. Checking the auction results to make sure my new car is covered with enough insurance was something I had not considered. Thanks Bob

                          I live 125 miles from the Barrett Jackson auction, yet I have only been twice, both in the same year. I went on my birthday then a few days later with a Studebaker buddy. The first day was a weekday and not as crowded as on the weekend. There was a 1956 Ceramic Green low mileage Golden Hawk that went for $20,000. It started low then picked up steam. This was at a time when the rage was muscle cars. I remember the high prices they commanded, and remember a 1932 Pierce Arrow that passed by me out in the field, that sold not far off from the price of the Golden Hawk. Peanuts compared to a not genuine 1969 Chevelle big block convertible that sold for $69,000. In my opinion, the 1968-9 Chevelle's were not a styling success in terms of not being a fluid design.

                          Just a casual observation: auctions are fluid and the trends that change are good to keep on top so you can be aware of how the hobbies (not sure the right word) state of current situation. I hope to go to the 2022 auction.

                          Bob Miles
                          Hands in pocket at the auction

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