by Mike –
The 2014 classic car auction season kicks off in a few days in Arizona and will move to Amelia Island, Florida in March. This is the time of the year many car collectors think about buying a new obsession.
As a potential buyer at a classic car auction it can be easy to fall into the trap of buying a car that we may later regret buying. It is difficult to perform a proper inspection at an auction and test drives are not the norm.
Buyers are in a position where they have to trust the integrity of the auction company, or not bid.
Can we trust classic car auction companies? That is the question.
Bizzarrini GT 5300 at auction
How much due diligence do auction companies perform before they accept a consignment and before they write up the car description for their catalog?
Is the chassis number authentic? Has the car really had a “nut and bolt” restoration? Is the documented history of the car accurate? How much of the original racecar was replaced with new body panels and other components after that major racing accident decades ago – or several accidents?
Ferrari waiting it’s turn on the auction block
These questions, and many more, can be difficult to answer before it is time to start bidding. But you must try and get as many answers as you can. The answers may cause you to not bid or to bid more aggressively. The answers certainly will impact the price you are willing to pay.
You can protect yourself somewhat. Do your homework on the car of interest before the auction and I suggest due diligence on the auction company as well. Ask your friends who may have knowledge and read about the history of the auction company in question. The more you know the better a decision you can make.
Dirt is not patina – it is dirt and maybe grime – but not patina.
Don’t forget – dirt is not patina and rust is not an asset no matter what the auction catalog says. Dirt and rust are the result of neglect by previous owners.
A very dirty Ferrari 275 GTB at an auction preview
The dirt on this Ferrari above was not removed by the owner or auction company and the auction company employees who were cleaning every other car were not allowed to touch the dirt on this Ferrari.
Rust is technically patina – however it is damaging patina – an indication of poor care by previous owners.
The rust on the bumpers below is real Aston Martin rust. However, if previous owners allowed this beautiful Aston Martin to deteriorate like this what else did they neglect that you can’t see?
Aston Martin with rust on the bumpers
If you decide to bid set a maximum bid and be sure to calculate in the auction commision plus other costs such as transportation.
Then do not go over that maximum bid because in the heat of the moment and the excitement of the auction atmosphere, which is fueled by the auction company, other attendees and other bidders, it can be easy to go over your limit of what you think the car is really worth.
Back to the question, can we trust classic car auction companies? I think we can trust some classic car auction companies just like everything else in life.
Let us know what you think in the Comments.
~ well reasoned advice, Mike.
. and after your auction experience express feedback as objectively as possible to friends and associates who are also interested in the vintage car world. there are a number of fine companies performing in the marketplace and all auctions ought to be held to a high standard.
In Jan. 2007 the RM catalog lists the Bauer Duesenberg (lot 249) as chassis 2405, while their March 2013 catalog lists the Walker-La Grande Duesenberg (lot 147) as chassis 2405. Appears one one these is the wrong number. Both of these were expensive cars and appear to be incorrectly documented with no explanation.
MIKE you are so CORRECT, just last Aug I Bought at auction here in Burbank Cal, a couple of cars, and one was a MODEL -A-COUP a lovely looking car, and of course they push the cars across the stage, and it was stated the car had gone through a 5 yr restoration etc. so it sounded GREAT , I bought the car, and a few days later if was delivered to my HOME, and WOW it came without KEYS HOW about that? so I have a fellow who reants one of my building and only works on T’s & A’s so I sent the car to HIM and 2 months later I get the car in now GREAT running condition, but he had to take the gas tank down, and clean it, as it had like glue inside for sitting for to long, the water pump had to be replaced, and keys had to be produced, and various other things, now the car is back as it should be, but the cost was just over $5,000 , so now it was not that super buy, but I still like the car, as it is the real thing, and many changes were made on the ’31 model A from the year before, so I am pleased, and even going back to the words of the auction, nothing was said no keys goes with the car, etc, so MIKE LIKE YOU SAY beware. but the winner was the 1963 AVANTI I bought is a stunning car, it was bought in DEC ’62, by DICK Van Dyke one of the SUPER NICE people of Hollywood, and to find out the car only has 14,000 miles on it and with ORIG tires, must replace them right away, but what a GREAT FIND this was. Enough said, but after having over 300 cars over the years, I sure will double more LIKELY to buy from the owners in the future, save fees & taxes etc. Ron Kellogg in Whittier Calif.
That Avanti is superb, it has it all….the looks , originality , low miles and great ownership history!
Mike, great this finally gets some attention. You know me and the Pre Purchase Inspections I perform and my experience is that auction cars are WAY more prone to incorrect descriptions than those sold by private sellers. I was hired by clients to inspect several cars at the Burbank auction Ron mentioned and gave them a maximum they could bid so they would be financially safe. NONE of the cars I inspected (mostly Italian exotics and US muscle) were as the auction company described them. Some had VERY expensive “hidden” problems! One phone bidder I work for a lot did not even have to call in, the car he was eyeballing was totally misrepresented. Still the auction house gets his bidder registration funds!
But here is one thing to consider: The auction houses can only do so much. They can not check the extent or quality of the work performed because of the mere quantity of cars listed. Example? I was hired by a Russian client a few months before the auction to inspect a Rolls Royce Corniche with extreme low mileage. It was a superb vehicle UNTIL I found it had a complete quarter section taken out and “repaired”….. No sale to the Russian client, of course. Then I happen to see that car at the Burbank auction, described as immaculate low mileage and of course the car looked stunning on the block. NO mention of any previous damage and perfect Carfax. It went to an unsuspecting buyer for (if I remember right) $25K higher than the asking price to my Russian client!! I have a few more examples of cars selling there WAY over the price I thought was top of the market. Luckily I made sure none of my clients ended up buying these cars but someone ended up with them.
I think it is the auction house’s duty to not bluntly copy the seller’s statements without proof (like “new engine”) as they do not have the personnel to verify this. (I saw an invoice for a rebuild on a Tremec while it was an automatic….) Also, one Ghibli came in only a few hours before the auction started so it was impossible to double check facts on it. And, not being able to weed out a seller’s ueber-positive description helps even the most sincere auction house can not weed out any trick they have up their sleeve. And, this also happens to work in favor of their own policy: the higher the selling price the higher their earned commission! So why would some try to dismantle false seller claims?
Why do sellers like to sell cars at auctions? One reason is that they don’t have to answer difficult questions from buyers; few people think of bringing their own inspector to an auction and unfortunately I can’t do all the tests I do in a shop or private setting. So you are right, even with the best intentions of the auction house: do your due diligence, bring your own knowledge and NEVER take the words in a catalog literally – only your own opinion counts!
Maurice Mentens
I agree with Maurice, you MUST do your due diligence. I’ve been going to auctions for many years, both wholesale and classic. Wholesale auctions (dealers) is more regimented than the public ones when it comes to structural integrity and mechanical issues, primarily on newer cars. Older and/or high mileage cars are sold as is based on ideology “buyer beware”. Branded or salvage title disclosure is a must. A dealer auction will reverse a sale based on limited set of conditions, mainly it concerns frame/structural damage. It will pass the expenses onto the selling dealer. Too many unwinds and the selling dealer may lose the privilege of selling vehicles through the auction.
Public auctions such as classic car auctions have a bit more lax approach. I happen to go quite regularly to a not so local auction. Although the “house” will announce a salvage or branded title, its more like glancing over the fact rather than making it clear beyond any doubt. I understand that branded titles play much less of a role in the consideration of a 60’s or 70’s cars but it is still a rather unpleasant surprise.
The classic car auctions tend to present themselves as an entertainment event. Many charge admittance fee (not to be confused with registration). This tends to create a lax and laid back atmosphere. Plus some of these auctions will serve alcohol. Hmm, shiny cool cars, energized atmosphere with fast pace bidding and pleny of hard liquor thrown into the mix…what could go wrong?!
The auction houses tend to create an aura of confidence in their merchandise. Since the cars are admitted to be offered at such fine establishments, they must be good, right? In defense of auction houses I have to say they are not an enforcement agency. As a re-seller their main obligation is to ensure that the car can be successfully registered in the selling state. Their function is to facilitate access to cars of interest and bring sellers and buyers together during an event. So please do not rely on anything an auction house may publish or announce – spend time (and sometimes money) before raising your hand. Best way to approach a classic car purchase is just like you would buying stocks and bonds or works of art.
Buy the best, name-shop restored car you can find and enjoy it.
There are no bargains, low quality “restoration” or repair is much worse than no repair… pay now or pay (double) later.
Beware!! of auction companies that report the final sale to include Fees/Commissions/Taxes etc
for sold price. Those fees have nothing to do with Market value. So what is their purpose?
The value is the auction block hammer price. Beware!! of insurance companies who claim to know the value of a car based on insurance value-not market values. Beware!! of companies that base value on a charity sale car.=These Special sales do not equal market value. Beware!! of media that knows they are printing
inaccurate collector car auction results.
This X collector car auctioneer has asked two of these so called services to the hobby-publications
with deaf ears-so I cancelled my 50+ year subscriptions. Our hobby does not need greed
Thank you for the article Mike,
Classic cars hobby is a passion, and selling and buying classic cars can be a respectfully and motivating activity. People that feel respect for these types of automotive should understand that selling classic cars is selling parts of the world recent history, and should be done by honorably way. Unfortunately, some times unscrupulous people are behind the selling of classic cars. Doing our own research is the best way to avoid buying a lemon, and send a message to the “smart” guys that they are not welcome in the auctions, including those that are executives or managers of the auctions that don’t have the passion for classic cars.