The appeal of prominent auctions is their reputation for quality cars (for buyers) and retail bidders (for sellers). Beyond the fanfare of new records, how many other expectations met? Are there good yardsticks beyond percent sold? Is there a fair measure of expectations vs. results? Pre-sale Estimates vs. Hammer Prices?
Spectators and bidders are never told the seller’s reserve (if there is one). Seller’s “worst-case” agreements with auctioneers are secret though we know it’s never above the catalog’s low-estimate. Unlike buyer’s fees which are printed in the catalog and rarely differ from 10%, seller’s terms vary down to zero depending on “significance” of the car, presence of a reserve (and its level in relation the entire estimated price range). Neither Gooding or RM add a fee for positioning within a sale but it can be very important. All is negotiable though first time sellers seldom realize it. Whatever the foregoing, registered bidders, sellers and spectators look to the nearly biblical auction catalogs for each car’s researched provenance, condition and estimated current low-to-high price range. If this is a reasonable portrayal of most auctions, the two charts here (below) may be a little jarring: Estimated Low” of each range is the average of hammered sales.
This “gap” is confirmed in Rick Carey’s auction analysis, tracked since 2008 at Sports Car Digest, click here to see his Monterey Auction Summary Report. Carey’s data shows a range of 45% to 70% of sales are below low-estimates. If there is a bright side, this month’s results were better than at Amelia Island last spring. Understanding this “gap” may be wiser than faulting it; competition for good cars tugs estimates upward. Attracting sufficiently purposeful bidders is the second test of an auction’s skill. If you’ve owned a car for decades the low estimate may look fine. If not, be prepared for it anyway: a seller’s odds of hitting or exceeding Estimated Price Midpoint is 1 in 4! Worse, odds of exceeding Estimated-Low are 1 in 2 (50%). Poor gambling? Suggestion: add sellers fee, travel & shipping to your net expectation and stick with a contracted minimum. For bidders (too), lesson no. 1: catalog price ranges are hostage sales tools chronically overestimating results.
RM’s lower average sale price is a consequence of more RM venues per year vying for their million dollar cars: Gooding’s higher average doesn’t “rub-off” on sale price of lower value cars. Another time we’ll examine results for Mercedes-Benz vs. other brands.
By John R. Olson – Editor and Publisher: The SL Market Letter