The Dark Side of Auctions |
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This is THE BIG WEEK in Arizona... the land of annual records in attendance (250,000 expected), in volume of collector cars offered (over 2,000), and in record prices. With new records set for sales every year appeal is strong for sellers. Buyers are attracted by the huge diversity of offerings and frequent "no-reserve" pricing. The entire 1,100 car Barrett-Jackson auction is now conducted with no-reserve pricing, which ensures a high percentage of cars sold. But don’t pack your suitcase just yet. Auction fees & taxes are also vying for records. Barrett-Jackson, the oldest and largest, collects 10% from buyers and 8% from sellers plus positioning fees for preferred time slots and substantial state and local taxes. With no reserve pricing what is a seller to do if bidding stalls way below reason? One estimate of "buy-backs" is 30% of all no-reserve cars crossing the block. "Buy-backs" pay both the buyer's and seller's commissions and taxes, which together can total over 20% to return home with the same car. After adding personal time, lodging, car shipping, and airfare, the experience can be downright painful. Why do people do it? FDA wouldn't approve medicine that was successful 70 percent of the time but advocates see more than 50 percent of the cars selling, some for record prices. For buyers my unscientific notes on past sales suggest 10% go for WAY too much money and 10% of the cars sold go for genuine bargains. -John Olson, Editor, SL MARKET LETTER |
Mercedes-Benz
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