Online Auction Tips for Collectors Car Buyers and Sellers

 

 

Serious car enthusiasts welcomed the post-pandemic return of live, in-person auctions during the 70th Annual Monterey Car Week. While those live car auctions and related events – including the legendary Pebble Beach Concours d’Elegance – remained “on hold” during 2020, the participation in online auctions has skyrocketed, and that trend is unlikely to lose momentum soon, according to Premier Financial Services, a leading provider of lease financing for exotic, vintage and collector cars.

In addition to online auctions conducted over the past 18 months by many of the well-known live auction houses such as RM Sotheby’s, Bonham’s, and Gooding & Company, a growing number of “online only” auctions – including Bring-a-Trailer, Cars & Bids, and the most recent newcomer ShiftGate Auctions – have been highly successful during the pandemic.

“Increased participation in motorsports over the past year as a way to cope with the pandemic, combined with greater visibility and market interest in exotic and vintage cars generated by online auctions, has accelerated our lease financing volume,” according to Doug Ewing, Premier’s Vice President of Sales.

For many car enthusiasts, online auctions are a new experience, and there’s a learning curve involved. Mr. Ewing noted that, “First, you need to determine whether it’s worth the expense and time to properly research, communicate, and participate successfully in any online auction. Whether buying or selling a car, there are unique logistics involved; notably, managing the financial transaction as well as title, registration, insurance, and transportation issues.”

 

Premier asked a few of the leading online auction houses what first-time buyers and sellers need to know. For car buyers, their tips included:

Be a Watcher First. Every online auction has its own unique rules and culture. Before you bid on any car, invest sufficient time to learn bidding tactics, and follow at least a few transactions closely to understand the auction nuances.

Do Your Homework. Check sale prices of similar cars on past auctions, and use online resources, such as Hagerty and Hammer Price, to learn current market values of cars you plan to bid on. Don’t get caught up in a bidding war that takes you too far outside of that range.

Get Ready to Buy. If you win an auction, you’re required to pay for the car right away. If not paying in cash, arrange for pre-approval to finance or lease well in advance. Be sure to plan for all fees, commissions, and related expenses.

Scrutinize the Car’s Condition. Some problems, such as water damage, are not always disclosed to CARFAX, and for pre-1981 cars, those reports are unavailable. For high-priced vehicles, consider arranging an inspection by a local dealer or qualified appraiser (at your expense.)

Evaluate the Seller. Monitor the quality of responses the seller provides to questions from bidders, and submit your own questions. Gain as much insight as possible into the seller’s backstory, including whether it’s a dealer or private party.

 

For car sellers, online auction tips included:

• Select the Right Auction. Pay attention to types of vehicles offered, price ranges, and whether auction participants are serious buyers or tire-kickers. Keep in mind that, even if you’re in the right place, not all cars are accepted for auction.
• Package your Car Properly. You may be handy with a camera, but hiring a professional photographer / videographer who specializes in cars is worth the investment. Most online auctions offer (or require) their assistance in writing your car’s description.
• Understand Reserve Pricing. Establishing a minimum value you’ll accept for your car may protect your financial and emotional interests, but keep in mind that vehicles offered with no reserve typically get more attention, and a greater number of bids and sales.
• Prepare to be Exclusive. Some online auctions require that your car not be listed for sale anywhere else. You’ll need to remove any advertisements for your car, and agree not to accept offers outside of the auction.
• Be Responsive and Transparent. Bidders seek a level of confidence in your honesty regarding the car, and how easy you’ll be to deal with if they win. It’s critical to respond to all questions quickly, and be upfront about all mechanical or cosmetic issues.

According to Premier’s Doug Ewing, “As the online ‘Amazon Age’ continues to encompass every aspect our lives, buying and selling cars through online automotive auctions is likely to gain greater participation across all vehicle categories. The trend should also help to increase understanding that lease financing is a viable option not only for new cars, but for previously owned exotic, vintage and luxury cars as well.”