Four Pros and Two Cons Why Online Auctions Make Sense for Collector Cars
This post is our first in a series of the current state of collector car auctions, both online and traditional events. In response to the growing popularity of online-blog-turned-auction-house Bring-A-Trailer, several alternatives (most notably Hemmings Auctions) launched in 2019 to get in on the action. With the 2020 collector car auction season commencing in Scottsdale, Arizona next month, we wanted to highlight the four pros online auctions provide while calling out the two cons both web-based and traditional collector car auctions have yet to address. Next week, we will provide our second installment: “Schill Bidders: Who Are They And How Do Your Protect Yourself From Them?”
While common sense dictates it’s a bad idea to buy any used car sight unseen from an online auction site, the same rule doesn’t necessarily apply for Antique, Classic, Muscle and Vintage collector cars.
Here are the four Pros why it makes sense:
- Selection – online collector car auction sites provide a variety of vehicles readily available for sale with pictures and video. It’s a no-brainer to find an excellent Mustang, Corvette, or Porsche 911 for sale in virtually any part of the US on any given day. However, if you have your heart set on finding a pristine ’52 Kaiser Manhattan like the one your grandfather drove when you were a kid, the quickest resource at your disposal will likely be an online auction site specializing in collector cars.
- Time and Travel Savings – the beauty of an online collector car auction is the convenience of being able to find and bid on the car of your choice from the comfort of your living room. While live auctions can be an exciting event, the money you save from not attending one can be better spent covering the shipping costs to get your new collector car delivered to your doorstep.
- No Test Drives At Any Auction – while you can inspect collector cars as much as you want and ask the owners questions before they arrive in front of the block at a live auction, you’re not going to drive the car until after the hammer falls. While traditional in-person collector car auctions such as Barrett-Jackson and Mecum make every attempt to offer quality cars, ones like this VW Squareback we called out this past summer at Mecum Harrisburg do fall through the cracks. Similarly, online Vintage and Classic Car auction site Bring a Trailer (“BaT”) relies heavily on their online community to vet out collector cars that look better than they really are. A prime example is this 1966 Mustang Convertible we originally featured in early June as our first “Side of the Road” car, only to discover it later that same month featured here on Bring a Trailer. To BaT’s credit, they kept our open and candid feedback about the car on the thread and consequently that Mustang never saw a bid higher than $5,550 and it went unsold. The point here is two-fold: with no way to drive the cars before the sale, it is imperative for buyers to get as much information as possible (either in person at a traditional auction or as many photos and videos as possible in an online venue) to ensure to minimize the risk you’ll get stuck with a bad vehicle from any of these collector car venues.
- Lower Fees – online collector car auction sites such as Bring a Trailer and Hemmings Auctions enjoy lower overhead costs than traditional auction houses. The table below summarizes the difference on a Poppy Red ’65 Mustang with a Wimbledon White interior that recently sold for $30,000:
While online collector car auctions offer these advantages, there are two cons both online and traditional auctions have yet to address.
First, one common disadvantage with both online (BaT and Hemmings) and traditional collector car (Barrett-Jackson and Mecum) auctions as all of these current alternatives rely on the highest-bid-wins English Style auction, especially when Dealers are allowed to bid in the same pool as private parties.
Second, none of the current auction houses do anything proactively to try and protect against “Shill” bidders, who are inserted with online or in the audience to bid up to just below the reserve price in an effort to pump up the selling price of each lot.
Stay tuned for upcoming installments where we will detail how these two cons need to be addressed.