Market and auctions

Auctions. How to buy? How to sell?

What we have learned from 2020. Cliff Goodall’s view

Photo credit: Gooding, RM Sotheby’s, Mecum, Wheelsage

“Happy New Year to all, I attempted to conduct an analysis of the auction market after the arrival of the great international companies into the online world in 2020. However, despite being a very interesting exercise, it proved to be far too lengthy and complex. So I’ll try to summarise it briefly on a simple balance sheet by using an example: at a market there are two stalls, one belongs to an online auction house, we’ll use Bring a Trailer in this instance and, alongside it, a large international auction house, let’s say Bonhams or RM. At the BaT stall, we find cars placed there by owners who want to sell, they are well priced, often without reserves, and when they are sold, the owner pays a very reasonable fee of somewhere between one and four percent. Potential customers observe the cars on offer exclusively online, they choose the ones they want and, if it’s worth it, they buy it. For buyers, this can turn out to be a true bargain, as almost always the car has not been seen previously. Somewhat like those weddings of the past, agreed upon by relatives! But more often than not the bet turns out to be a winning one.

At the stall next to it, the one owned by the great auction house, there is far more excitement: for starters, those who turn to them to sell their car, which is very often an important one, perhaps at an event such as Pebble Beach or Le Mans Classic, know that the stall will attract the right audience: they have impressive lists of customers who have already bought from them, almost a guarantee if you will. A guarantee that also applies if the auction is held online, however. Then they have specialists who travel around the world in search of important lots or entire collections to offer. Their catalogues are highly detailed and the car can usually be viewed in person. Naturally, the commissions for those selling are somewhat higher, and can reach up to 10%. But it should be remembered that an auction, unlike a sale between private individuals, is subject to the famous “law of large numbers”: it is not enough to have an enthusiast who wants the car and one who sells it. At this stall, the more people interested in the car, the more the price goes up. This is worth remembering: is it better to pay a small commission and sell more or less at the correct price or pay more and hope the car becomes the object of a bidding war which pushes the price above every estimate? That’s not for me to say.

I can however promise you that we will be looking at the 2021 Auctions from this perspective as well. Whether you are selling, buying or simply curious, it’s nice to see what happens in reality. And useful. Cliff’s word.”

Figures and comments:

Graph 1 shows that in the United States, more than 80% of the cars on offer were sold but only managed to bring home 73% of their overall value, which is proportionally lower than in European countries, including Switzerland, where the two percentages are aligned. Great Britain provides decidedly different results, the value of which was heavily influenced by the Gooding Auction, which featured cars with high commercial value – Bugatti first and foremost. In this case, despite selling 61% of the cars on offer, turnover reached 76% in value
Graph 2 equates the types of auctions. After comparing auctions by type – online, mixed online and cars sold by an auctioneer in presence of a buying public – the most significant data is the success of traditional online auctions with an expiration date and time: an average price of $172,000 with almost one third of the cars offered without reserve is very interesting. It’s too early to make a judgment on mixed online auction formulas while there is a clear price gap between the cars sold in the USA and those in the UK, that sits in the region of 25% after the stunning result at Gooding in London which featured several important Bugatti models. We will follow the market to keep an eye on how the different systems evolve

Some 2020 opportunities to keep in mind:

Wicker straw on the sides, small cosmetic touch-ups and the Renault 4 became the Parisienne to great acclaim. A great way to invest your savings
They may not immediately recognize that you’re in a Porsche, but they’ll certainly envy you: the 944 S2 Cabriolet is the perfect opportunity to enter the world of Porsche without having to invest a fortune
The mighty and magnificent Diablo, here in VT Roadster version – where VT indicates Viscous Traction – is among the greatest sports cars that are still approachable. An extreme case in 2020 was the coupe model once owned by Mario Andretti which sold for just $68,200 at the first RM digital auction held in March
The great success of the Ferrari F355 reaches its zenith with the Spider version. Reliable and fun, it’s certainly an investment if well looked after
The mighty yet brutally fun Dodge Viper has always been popular but it’s starting to attract the attention of collectors
The Austin Healey 3000 MK II, the penultimate version of this charming roadster with its smiling grille, also makes you smile at its price. An identical model was sold online by RM Sotheby’s last July for $29,700
Having fun inexpensively. Small English sports cars like the Fairthorpe with its fiberglass bodywork can make great deals. One was sold for just £5,500 by CCA. It might be safe, but without that roll-bar it would be worth more