My Car Quest

March 1, 2024

Is The Car Collecting Culture Becoming More Like The Art Collecting Business?

by Mike Gulett –

From the My Car Quest Wayback Machine – this article was originally published in October 2014 and the cartoon was originally published in January 2015.

The collector car market auction business has grown very fast in recent years to become a billion dollar per year global market. This fast growth creates opportunities and it can create problems. I hope the car collector culture and business does not evolve in the same way that the fine art business world has.

An article in the New York Times on October 18, 2014 about the art collecting world said this,

The art market, many say, is now driven more by speculation and trading than by long-term collectors or underlying value. Even as prices reach glittering new highs, … art remains one of the world’s largest unregulated markets, with remarkably little disclosure or conflict-of-interest rules.

Auction houses, for instance, now use “third-party guarantees,” in which an anonymous investor or collector agrees to buy a piece before auction at an undisclosed price. Those investors can also bid on the work and get a share of profits if it sells to someone else for a higher price. Dealers commonly buy back work from their own artists to support prices, collectors and gallerists say. And more top works are being bought, traded and sold by groups of individuals with undisclosed business ties.

Ferrari Testa Rossa

1957 Ferrari Testa Rossa – Sold at the Gooding Auction in August 2011 for $16,390,000 USD

Business is a good thing as long as there is disclosure about how business is to be transacted and the auction companies are open about how the final auction price is set. I am not aware of “third-party guarantees” in collector car auctions which are apparently common in the fine art auction world according to The New York Times. I hope it never happens in the collector car world.

Chandelier Bid (see the author’s cartoon below)

Chandelier bids are common in the collector car auction world.

A chandelier bid is a bid that has been placed by the auctioneer, not by an auction participant, to create the appearance of more bidders in the room than there really are at that price point. This happens frequently when the car has a reserve price and the auctioneer bids below the reserve price to keep the bidding momentum going, or to create bidding momentum.

The auction company justification is that if the bidding doesn’t reach the reserve price then the car will not sell and the auctioneer is helping the real bidders move along with the bidding process. And if a bidder bids higher than a chandelier bid then that bidder is willing to pay that higher price and so the auctioneer is merely helping the process reach the logical conclusion of the car selling at, or above, the reserve price. The real bidders do not know the reserve price number.

Porsche 911S - Steve McQueen

The Steve McQueen 1970 Porsche 911S sold by RM in August 2011 for $1,250,000 USD – photo by Mike Gulett

The fact that chandelier bidding occurs is not a secret except, perhaps at the moment the chandelier bidding is happening the real bidders in the room may not be aware that it is happening. The auctioneer certainly hopes no one is aware he is placing bids.

It is possible that a real bidder may bid up the price to reach the reserve with the only other bidder being the auctioneer. I would not like to be a bidder who is bidding against the auctioneer up to the reserve price.

The purpose of an auction, from a buyers point of view, is to be able to see what the item offered is really worth by bidding against other real buyers. If there are no other real buyers and there is only one bidder then that should be a signal about the value of the item on that day.

The reserve price protects the seller. But it is possible that after the auction with a “no sale” the bidder, the seller and the auction company can come to an agreement to sell the car with all three parties compromising a little on price paid, value received and commissions collected.

Ferrari 250 GTO For Sale

Ferrari 250 GTO At The Bonhams Auction In Carmel, August 2014 – Sold for $38,115,000 USD

But if the price is artificially set by chandelier bidding then the buyer may be paying more than necessary, the seller may get more, or less, depending on the actual numbers and the auction company collects a higher commission than they would have otherwise.

Appropriate disclosure and conflict of interest in the collector car market

If the collector car auction business starts to use third-party guarantees this would be a big problem because the guarantors have a secret interest in the auction price and an advantage over real bidders because a bidder who really wants the car will compete against the guarantor who only wants to get the price as high as possible while having another bidder win the auction. This doesn’t seem fair does it?

Ferrari 250 GTO For Sale-collector car market

Ferrari 250 GTO At The Bonhams Auction In Carmel, August 2014 – Sold for $38,115,000 USD

Third-party guarantees create a conflict of interest and should not be allowed. Auction companies should disclose their policies and tell buyers and sellers how they will conduct business. Transparency and no conflict of interest are in the best interest of the collector car auction business because it protects both buyers and sellers which is good for business.

It is easy to think this subject only affects wealthy buyers and sellers but the practice of chandelier bidding happens at all price points. And there is no reason to believe that third-party guarantees couldn’t happen at all price points as well.

I searched the web sites of several collector car auction companies and I did not find anything on the subject of disclosure and conflict of interests.

I encourage collector car auction companies to take the lead on appropriate disclosure and eliminating potential conflict of interests. It will be good for the auction companies and their customers – both buyers and sellers.

Let us know what you think about this in the Comments.

Ferrari 365 P Berlinetta Speciale "Tre Posti"- collector car market

1966 Ferrari 365 P Berlinetta Speciale “Tre Posti” – No sale at $22,500,000 USD at the Gooding auction in August 2014

All photos by Mike Gulett.

Chandelier Bid – The Cartoon by Mike Gulett

My Car Quest Cartoon

My Car Quest Cartoon

My Car Quest Cartoon

My Car Quest Cartoon

My Car Quest Cartoon

My Car Quest Cartoon

My Car Quest Cartoon

My Car Quest Cartoon

Is The Car Collecting Culture Becoming More Like The Art Collecting Business?
Article Name
Is The Car Collecting Culture Becoming More Like The Art Collecting Business?
Do you know how bidding is handled at collector car market auctions? Hopefully not like in the art world.


  1. Jim Gardiner says

    Is The Boat Collecting Culture Becoming More Like The Car Collecting Business?

    Boats that didn’t sell at the Mecum “No Reserve” auction……
    If this was truly a “No Reserve” auction, wouldn’t all of the boats at the auction sell?

    The following were all bid at auction but the “buyers” never paid.

    1949 Hacker Craft 36′ Triple Cockpit – Thunderballs
    1909 Moore Enclosed Glass Launch 41′ – Harriet
    1936 Chris Craft 22′ 519 Custom Triple Cockpit Runabout – Wee Don
    1918 Luyere 30′ Custom Launch – So Long
    1929 Dodge Watercar – Model 826 Geri
    1922 Chris Craft 26′ Standard Runabout – Queen
    1931 Dodge Watercar – Model 826 Snoop
    Two Rolls Royce Engines
    A Box of 19th Century Shipwright Tools

    It wasn’t really a “No Reserve” auction now, Was it?

    • Thanks for sending this news article although it is a few years old. The behavior described would have the same effect as third-party guarantees described in the New York Times article above.

  2. Fredric Quinn says

    Is this really even a question anymore? I would’ve thought all of that was settled with the formal exhibition of the now world famous Ralph Lauren collection, first at the Boston Museum of Art which was the inspiration to the book
    ” Speed,Style, & Beauty” which also inspired the Discovery Documentary of the same name in 2007 to be followed by
    a second exhibition by the most world famous museum of museums of art who easily has the last word in what art is,
    the almighty Louvre in 2011. I wrote about this very subject in trying to take Citizen Ralph to task ,as if my opinion mattered, in trying to understand why the $6 billion dollar man,Citizen Ralph, considering a good third of his clothes line and Citizen Ralph ,himself , is equally world famous for celebrating , and thus being celebrated as, quintessentially *American*style and yet , in his entire celebrated collection of , his term, *automotive works of art*,he has deemed American vintage sports cars are not worthy to be in his collection. The case I attempt to make is all expressed in the article’s title;

  3. Ira Schwartz says

    As they say, “Sunshine is the best disinfectant”, so let’s mandate full disclosure. At least then the playing field is level.

    • wallace wyss says

      Two different points: I think, as a long time observer, collector and even seller at auctions of exotics, that a new audience has been cultivated that realizes there is status to be had by owning a certain car. Similar to the status of owning a certain painting, print or sculpture. And yet, in the art field there are many many fakes (especially Warhol fakes) leading to many lawsuits, so those looking at cars realize, by comparison, it is almost impossible to fake a car so easily, with the quick ability in some makes, for instance, of authenticating the SN, such as Porsche 356s being traceable by the Kardex system. So your investment is better protected. Plus you can take said Porsche, Ferrari, etc. on an event like the Colorado Grand, which you can’t do with a painting.

      Now I want to defend poor Ralphie. The point of him collecting these cars was that he appreciates beauty in all its forms (down to the look of a French seam) and his choice of cars reflects his appreciation of the styling, content and form of various cars. If there were American cars that approached the beauty of Europe’s best (Ferrari GTO, LM, etc.) or Bugatti, he might choose to own them but that haven’t struck his gong, of whatever. I have been in his flagship store in NYC and appreciate how the ambiance of that store (which is really over the top selling the “Great Gatsby” image) which makes you want to buy clothes made for a man of great taste. Plus I don’t think his clothing and housewares are all sold as American style, I read a book about him and it notes the example of how hard he tried to order sheets that were a French style not available in America.

      Going back to his cars,I have seen pictures of him driving his cars at his various homes, such as outside the Telluride ranch, so he really is experiencing the cars. He’s not a hands-on let’s-change-the-spark-plugs guy like Leno but is a model collector in my mind for his taste and refinement.

  4. I once (years ago) served as the “car describer” at a major auction. I chose never to do it again, as I am a lawyer, bound by a strict code of ethics, and felt that the system described in this article could be construed as unethical, if not downright illegal. Maybe I’m too cautious? Or not.

  5. Wallace Wyss says

    Entry in the art world. A Japanese man, Yusaku Maezawa– just got in a bidding war for a Basquait painting and paid $110 million, for work from an artist in America who only painted for a few years (’80-’87) and died young. He was up against a casino magnate. The Japanese billionaire also collects Patek Phippe and Richard Mille watches. He posts pictures of all his goodies–including a Bombardier Global 6000 private jet–on Instagram. So I think that the art market is still way ahead of the car world in terms of “I’ll show you who can spend the most.” I can’t believe he spent it on such an obscure artist instead of a Van Gogh….

    • Glenn Krasner says


      I don’t know much about art, but I know that Basquiat is not considered obscure at all at this point. As an investment, you cannot go wrong these days investing in a Basquiat or Keith Haring painting. There was even a recent controversey at the Orlando Museum of Art, which unknowingly had an exhibition that included Basquiat forgeries, and the result was the firing of their curator, and the forgers most probably heading to a jail cell later this year.

      As far as Ralph, his car collection warehouse in Bedford in Upstate New York, has all the cars displayed on platforms with ramps, so that he can drive them out and and about, and he does so regularly. Legend has it that Ralph Lifshitz from the Bronx started off sellng his ties from a briefcase with legs in front of Bloomingdale’s, went on to work for other clotihng designers, and then began his own design house. The whole Gatsby and especially the whole Western motiff construction of his lifestyle brand is incredible artiface marketing of the highest order, as I don’t know of many ranches up in the Bronx.

      As for all this auction chacanery that Mike wrote about (who even knew about “chandelier bids”?!?!?!), it’s just another reason for me to never buy a car at auction. Lack of adequate mechanical inspection, competing against bidders, “reserve prices”, chandelier bidding, I always knew you’ll always pay for more for a car at auction probably than anywhere else. But, I still love watching those Barrett-Jackson and Mecum Auctions on tv, because the cars displayed at them are the utmost in car porn.

      Glenn in Brooklyn, NY.

      • Bob Wachtel says

        I am “Bungalow Bob” Wachtel and I approve this message.

        • Glenn Krasner says

          It’s always a wonderfully fullfilling feeling obtaining your approval, Bungalow Bob!!!! It makes me feel like I actually accomplished something in this life!!!! Glenn in Brooklyn, NY.

  6. I just watched the movie Monuments Men, Great job telling the story about all the art stolen by the Germans during WWII. Will the GTO’s and Testa Rossa’s be secretly hidden away in a similar manner ?

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