Going Once, Going Twice – How To Sell Your Car At Auction
The biggest waste, I guess, would be having unrealistic expectations of value – Tony Klein
Auto auctions have become popular on cable TV for the excitement and unique cars that are shown. This popularity has broken into the mainstream public’s eye and while these may seem like new methods of selling vehicles, the truth is that over nine-million cars are sold at auction every year according to the National Auto Auction Association.
We caught up with Tony Klein, Consignment Manager at RK Motors, to find out the ins and outs of how to sell a car at an auction. Klein will guide us through preparing your car to be auctioned – what you must do and what you should do – to make your experience a good one.
About RK Motors
About Tony Klein
Tony knew from a very young age that he wanted to be involved in the classic car industry. Fresh from the family dairy farm in Iowa, Tony set off for Laramie, WY to acquire specialized training from WyoTech.
Directly out of school, he began restoring investment grade muscle cars in a two man shop, gaining knowledge of all aspects of restoration. Since his recent move to Charlotte, Tony has been enjoying doing exactly what he set out to do: work with classic cars and others that love them as well.
RK Motors was formed in 2010 when Rob Kauffman, founder of RK Collection and co-owner of Michael Waltrip Racing, and Joseph M. Carroll, founder of Best of Show Automotive, combined their automotive knowledge and business insight into this innovative collector car retailer.
From November 2010, their state-of-the-art showroom has become a destination for serious collectors from all over the world. Aside from inventory cars, the RK Motors Performance Center has also restored some of the most legendary cars to ever prowl pavement, and those cars have gone on to collect trophies at some of the largest shows in the country.
The core of their operation is a group of serious car enthusiasts looking for ways to make the hobby more enjoyable and accessible to everyone interested.
Auto Auctions Explained
There are several types of auto auctions operating in the United States today. Some auto auctions exist as an outlet for banks, the IRS, and other government agencies to sell vehicles that were seized or repossessed.
There are government auctions to sell US Government vehicles periodically while other auctions are held as a primary outlet for banks, other financial institutions, and car dealerships to dispose of their off-lease returns. There are also auctions to sell rentals, aging fleet vehicles, or to dump trade-ins and other unwanted inventory. Salvage auctions are designed for insurance companies to sell totaled vehicles to the public.
Then there are specific collector car auctions and general auctions. Specialized auto auctions for classic and antique cars are different than local general auto auctions. Auctions can also be closed format or public format auctions. Closed auctions are specifically for dealers, so make sure you put your vehicle in the right auction.
Prepping Your Car For Auction
Whether you decide to take you car to a local auction or a high profile elite car auction, there are some steps that you can take that will help your car sell and get maximum value, when the gavel hits. “When preparing your car for sale, it is hard to say anything is a waste of time. The biggest waste, I guess, would be having unrealistic expectations of value,” said Klein.
Selling a car at auction has several benefits over hanging a “For Sale” sign in the back window or taking your car to a used car dealer for consignment. Auctions allow owners to turn cars into cash quickly, plus the large volume of cars moved through an auction does not depress the prices. An auction will bring together a large amount of vehicles and buyers that ultimately establish market values for vehicles. This pricing gives the industry an objective view of what vehicles are worth in the current market.
To take full advantage of these benefits, there are some things that a seller can do to prepare for an auction.
Things You MUST DO To Prepare Your Car For Auction
Klein explained everything a seller must do before taking a vehicle to auction: “Details. The first thing is about the details. Clean your ride, give it a good old-fashioned cleaning. Wash, polish, wax, vacuum, detail, etc…” It’s been proven that a well-presented car attracts more attention from bidders.
Any maintenance item that you’ve been putting off should be done in the preparation. “If you have changed a leaking gasket a year ago, but never cleaned the caked on grease from the engine – Now is the time,” said Klein.
Along with physically detailing the car, a seller should pay attention to the other details as well. “Research,” states Klein. “Determine a fair market value, and decide what you are willing to take for the vehicle.” There are a number of different resources that can be used to determine what the current market value is for used vehicles.
“The National Automotive Dealer’s Association (NADA) has a classic car section, which is a great start,” explains Klein. “Even insurance companies, such as Hagerty have guide books that are a good resource as well. If you are not able to identify a clear value using the guides, you may consider hiring an experienced appraiser. All that said, nothing beats a good sold comp.”
Don’t overlook your paperwork either. “Check your title and VIN,” Klein advises. “Be sure your title is clear of all liens and errors. Also, be sure the VIN is affixed to the vehicle, and that it matches the title. At every large auction, we see a dozen or more cars set aside with VIN issues, forcing the sellers to make a mad scramble to resolve in time for the sale.”
If you have maintained good records of maintenance and repairs, you will be rewarded for your effort. An accurate log can reap benefits for the next owner, additionally the seller should find out whether the factory or extended warranty on the vehicle is still valid and transferable to the buyer. All of this could add to the value of the vehicle.
Things You Should Do
Just because there is an auction scheduled in your area doesn’t mean that it’s the right time for you to attempt to sell your vehicle. “You should consider the time of year,” Klein said. “Highly desirable collectibles tend to sell year-round, however if you are trying to sell a ’32 Ford Roadster street rod, the latter part of the year may not be a good time.”
You will probably be asked to fill out a number of forms and give the auction company pictures of your vehicle. Understand that you will pay a consignment fee, which is very reasonable. Be aware that the auction company will also take a percentage of the selling price so make sure that you include that into your reserve and asking price.
Klein advises sellers to “take quality photos.” Generally these are asked for well in advance of the auction date so that the auction company can market the cars properly. “The auction company will ask for photos, which they will use to market the car months in advance. Take some time, and send the best pictures you can. Also be sure to send them as early as possible, so they can have plenty of time to advertise the car. You are paying for the marketing,” explained Klein. “If you need help, this is the time to ask! Quality photos will get buyers excited to make the trip to the auction. Many buyers show up for just one car.”
Be prepared to show up at the auction when your car is being sold. “Arrive to the event early, and be ready to answer questions,” advises Klein. “The days leading up to the auction are days where potential buyers get to inspect the vehicles before going onto the block. Giving potential buyers the answers they are looking for may build enough confidence in them to bid.”
Drive the car across the block if the auction house lets you. There is a positive sense created when the vehicles are represented by the seller. Even if the seller is standing behind the vehicle in the lanes during the auction.
Things You Might Want To Consider
Some other things that can maximize a vehicle’s value include reconditioning, certification, and effectively representing the vehicle. Most auctions offer reconditioning services like dent removal, body work, detailing, glass replacement, and paint services. Many auction companies offer consignors a vehicle certification program. The program allows the seller to choose a level of certification.
Finally, be realistic and understand what drives pricing. Condition is an obvious consideration and first impressions do matter. Premium colors usually bring higher selling prices too. Popular colored vehicles can bring as much as $1,000 higher than the same vehicle in a different color. Consider this; would you buy a Ferrari in any color other than red? How about a Mopar that wasn’t Plum Crazy Purple or Competition Orange? Supply and demand still drive the market. That is the first rule of economics and still drives the pricing.
Lastly, remember that the auction house does not make money if your car does not sell. They are working with you so try to provide them with everything they ask for. In return, you should have a successful and enjoyable transaction.