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Hagerty
Hagerty Employee

The 2020 collector car market was a frame-off rebuild, and it likely won't ever be the same | Hagerty Media

I've been in the collector car trade for over 30 years, so I'd like to think I've seen it all. Nope. Thanks to 2020, I can add "pandemic" to the list. In 2019, following years of unprecedented growth, the market slowed. Many expected more of the same going into 2020.
https://www.hagerty.com/media/magazine-features/the-2020-collector-car-market-was-a-frame-off-rebuil...
19 REPLIES 19
fasteddee
New Driver

i strongly feel paying a 2% added fee for the privilege of bidding online is crazy. as the new auction formats offer the same quality at a much lower cost, hopefully the b-j's & mecums of the industry will realize this is just pure & simple price gouging and learn to be happy with "just" a normal 20% cut of the sale. i feel the new internet auctions will quickly erode the market position the big auction houses believe they hold on our hobby. the times are changing.
Waterboy1KHY80
Intermediate Driver

Almost sounds like an "online entrepreneurs" opportunity to do a start up company selling cars on line at fair market prices.
ed
Detailer

I just bought an SLK55 from Carvana. 7 day right to refuse, 100 day warranty, delivered to my door. Right at KBB. What's not to like? Certainly, I had no more opportunity to kick the tires than with the 20 that came from eBay, and none of those had a warranty.

 

My son sold his Prius to Carvana, got more than any dealer would give him on trade.  They sent a truck to pick it up, and handed him a check.

PAL
New Driver

I remember years ago when cars were first being advertised online it was strongly recommended to travel (incurring expenses of course) to wherever the car was to physically inspect it and you were considered a fool if you didn't. Of course things evolve and then you were able to hire inspection services which of course still means added expenses on top of the cost of the car, transport etc. A couple years ago I had a friend who bought a car from Carvana. Yes he had the 7 day right to refuse and the warranty but he knew right away that there was something not quite right with the car. He took it to his mechanic (I believe he had to pay for it out of his own pocket if I remember correctly). They concluded that the car had been exposed to a flood, there was actual high water lines on the inner fender wells of the car. So back goes the car and he orders another one from Carvana. After all, no one's perfect and issues do happen, right? Long story short, 2nd car had issues as well (don't recall exactly what) and that car got sent back as well. He ended up going to a dealer to get the car he needed. So he had back to back issues getting a car from an online site, incurred added expenses, and by the time all was said and done with getting delivery, inspections, and then sending both cars back; he lost out on several weeks of his valuable time as well. So where's the convenience in that? I'm not totally knocking the idea of these online sites, or even Carvana itself as I'm sure many people reading this have had good experiences. I'll just yield to the wisdom of Mike Brady: "Caveat emptor Greg!"
ddd57
New Driver

There is a reason for the added fee as the number of failure to pays that occur with online winning bids is 10x that of in person auction winning bids. The large auction houses(of which I worked for one) will always make the seller whole in some way at their expense when this happens. Because of this the auction houses use this additional percentage to help even out the losses that they incur on these fake sales. Banks do the same thing everyday when they charge you an interest rate based on the level of risk associated with your loan.
25aniv
Intermediate Driver

I feel any leap in short term price spikes will be more related to Covid restrictions than actual feet on the ground auction house style buying anyway. Lots of people with no where to go and money to spend. Live auctions are going to become dinosaurs and the blatant gouging will certainly lead to their demise. They will only get more greedy and a noticeable shift away from that format will come.
There are more sources for confirming a vehicle's condition than as you say, a 15" screen. I for one won't be going back to any live auctions. The pandemic has taught me we can do pretty much everything remotely...contact with friends and all. I don't miss the crowds one bit.
dough
Intermediate Driver

As a small collector car business owner, I just returned from a regional collector car auction, and everything was pretty much the same as before, except for the social distancing aspects still in place (although rarely observed in actual practice). Not only that, I have refused to buy and sell at price-gouging venues like Mecum and BJ, et al for more almost a decade. I can carry on my business just fine without them, and strongly prefer giving my commissions and fees to those auction houses who still respect my need to put food on the table just the same as them. The ones I typically attend charge 5-7% commissions on either side of the transaction, and less if the unit is sold at "no reserve." The rest of the sheep can continue to be fleeced by these greedy auction houses, but not me. I hope others finally say they've "had enough" as well and simply walk away, or over, to the smaller houses who still respect their clientele. Or, maybe we can go back to "the olden days" and they can just bring me their cars directly and we can eliminate the middle man entirely....
ed
Detailer

I think a large part of the big auction venue is flashing the money. B-J and Mecum and others have long excluded the buyer with modest means. I've tried to imagine myself sitting there and bidding $50K for a nice Camaro or $150K for a resto-mod of some sort, but the practical side of me knows it will never happen. So, those with enough money to buy with pocket change will continue to go and back-slap their rivals, and the auction houses will make money on both ends and the TV rights, and the rest of us, like me, will change the channel and dig through CraigsList, and eBay, and BaT, etc, looking for that sleeper, real vehicle with potential that we can actually afford.
Toomanyhobbies
New Driver

After many years of watching auctions on TV, and attending a few, I could never really understand the price premium on the actual selling price let alone the commissions. For the less rare cars, say your GTO, vette or 442, you can almost always buy the same car for less in a private sale and then not pay the commission. That's why when they show the buyers on TV they are either super rich people who don't care or 60+ and have been planning for the last 20 years to show up and buy a car at auction so they can be a celebrity for 3 minutes. When there is an outright bidding war on a 427 Cobra, McClaren F1, a gullwing 300SL or a 507, I get why the price goes up, but on 98% of the cars that go across the block, you can get a way better deal somewhere else.

Covid has exposed many industries that were rolling along on busted business models, that's for sure...
chrlsful
Instructor

"...or moved online..."; "...unwillingness for many to pay what it takes to conduct business at a live auction..."
and there U have it. The 'internet of things' has caused the ol supply'n demand model - out the window. Who sells w/o an auction now (the uninformed)? Few, & even less w/o it being on-line as well. Now the model is "deepest pockets", international bids, etc. I would say its the opposite, less transparency too, not more.
Very similar to my town w/huge rents/mortgages. A property stays on the market (if it is even placed 'on') just days. Private homes are snapped up by cash (not even mortgages) and converted to rentals (nota home - an income producer for absentees). Prices will cont. to rise even on the mid mrkt cars.
Jost
Intermediate Driver

I think that the online auctions will grow and be more acceptable over time. There will always be people who prefer to buy that way, I think more and more all the time, especially post covid. I for one would never buy clothes online, but now I do. I simply return what I don't like and lo and behold, its easy. With that said, buying a car is emotional and many if not most of us DO want to see and inspect before we buy. I think that there will be a place for both online auctions and real time in person auctions. The in person auctions will have to compete and will tweak their charges, just as everyone else does who competes with internet sales. There is room for everyone
jbarone01
Pit Crew

Some people seem to have enjoyed the auction "fever" and bidding for a car that you could probably find for less money else where.
I still enjoy tracking down a private owner selling something I would like to buy next and closing the deal the old fashion way. I use various on-line sites to locate said vehicles, all within some set distance that I am willing to travel to look at it. No point in living on the East Coast and looking at cars on the West Coast; too many hassles in getting the cars home and too many disappointments once they arrive. I guess if money is not an object to you (It is for me), then paying the high auction fees probably would not bother you. And I guess there may be some piece of mind in knowing that the cars going across the block must meet certain standards to have gotten into mix. That might be enough to convince some people to go the auction route.
One last point that I have heard from some friends who attend these major auctions: There can be good deals on the "OFF" periods running up to weekend big ticket items that draw the crowds. More than one person has shared that info with me, Just my two cents worth.....Thanks !!
Velocetta
Pit Crew

Bring a Trailer is the best current model for online auctions. The sellers do very well (in general) and especially if there are two bidders eager to win the auction.
Sellers pay a $99 listing fee. There are no other seller fees on BaT. Buyers pay a 5% fee on top of the final sale price to BaT, with a minimum of $250, and capped at $5,000.
BaT model is much better for both the seller as well as the bidder than any in person auction that I have ever attended. Win/Win for both parties as far as I can see.
dooscoop32
Intermediate Driver

I remember so well what a guy told me that I sold a car to.

He went to Mecum Kissimmee a few years ago looking for a '32 Ford Street Rod. He figured out that what he liked, he couldn't afford. And what he could afford, he didn't like. And so it goes.
TG
Advanced Driver

While there is a certain segment of the population that wanted to wear facemasks, stay bathed in hand sanitizer, and do everything online even before the pandemic, I do not believe the rest of us are actually going to tolerate the 'new normal' for long, regardless of what the infection rates do. Life is about living - not living longer.
I imagine some live events will never come back, but others will, and new ones will fill the vacuum. Going to a live event is as much about seeing the cars, and the people, as it is about buying things
F360Spider
Detailer

>> this meant the house often retained 22 percent of a deal

What a freakin ripoff! I wouldn't pay 22 percent commission for anything. BAT is high too, but at least they have a maximum. Maybe some Amazon like genius will put an end to this robbery.
Oldsmobile1988
Pit Crew

Agreed, there is nothing like being at a live auction. Enjoyed them for the past 15 years. Purchased a number of vehicles at B J and Dana mecum house of cards. Buying at auction can be risky if you don't educate yourself. To me that's part of the fun!! So far I have made a few bucks. It's hard to say that about a hobby. Personally my Girlfriend and I came down with the Virus after attending Barrett-jackson last January. Although we can't say for sure it was the only thing we did publicly. We attended every day of the auction. I'm personally glad to see other avenues to purchase quality cars.
I have used Hemming to sell with good luck! With all that being said we are off to MECUM tomorrow in Glendale. And Barrett-jackson next week. HAVE MASK WILL TRAVEL. Every One be safe, but most of all enjoy your LIFE! And enjoy what car floats your boat.
jluvzcrz
Pit Crew

I can't speak to how the big auction houses have been affected as I have never attended one in person but I have access to a large New England dealer auction and prices have been near retail in my opinion for a year now. It is crazy what some are paying for a good used car or truck to put on their lot. However, I think the online auction has it's place and will become even more popular. I think it gives people a chance to think rationally rather than emotionally which can happen at a live event. Case in point, I just watched a classic GT car go through the dealer auction this week. I researched the vin number and found that it sold at Barrett Jackson in late 2019. Not a big dollar car but they paid what I thought was a premium price. The car sold at less than 70% of what the buyer had paid just a year earlier. If the dealer made anything on the sale then the person that traded it really lost some money or just wanted something else and didn't care. So yes the market may have done well during the pandemic but I will be interested to see what happens as the economy tries to right itself over the next few years.
Maestro1
Instructor

Colin, thank you.
I've been in the Hobby for a while and watched as prices escalated. I've watched the flippers, the speculators, all the trash come into the space because of the strong upside. I really think we'll see a correction in the Market. And I think auctions support an unhealthy rise in values because the prices in an Auction are not driven by objectivity; they are driven by pure herd lust. I never attend auctions,
I ignore Hemmings In Your Face Auctions, the publication is a disappointment after losing two of its main pillars Lentinello and Menneta.
I buy my cars off the street, in car ports resting (!) attorneys make me aware of estate sales. I've been around cars since I was 10 years old, working with my Father in the garage in Massachusetts.
I will be 84 years old this year and still active even after a stroke so I can't wrench anymore.
I share with Hagerties my Impala in the Barn progress and I hope they are not bored by it.
Stay well all of you at Hagerty and Colin thanks again.