Buying a classic at auction: five top tips for how not to get carried away

You’ve seen the programmes, you’ve read the magazines: you want a classic car of your own.
There are hundreds of auction houses, both online and in-person; if you don’t want to haggle via the classifieds, the salerooms are the place to go.

For a newcomer, however, the process can be a daunting one; the adage of ‘buyer beware’ applies, as always. Thousands of worthy cars are purchased every month through auctions, but it’s easy to get sucked in without a firm a grasp of what’s occurring.

Lancaster Insurance Services approached Evoke Classics’ sales director Sarah Crabtree, for guidance through the maze; her five tips for success around the block are below.

1. Go to a few auctions before you pull the trigger

‘Don’t buy a car at your first auction, that’s what I would suggest,’ Sarah said.
‘Watch what happens, understand what’s happening, understand the terminology that the auctioneer’s using. Researching the car that [you] want [overall] would be in my top five, rather than the model, that would be 6^th.’

Knowing what specification of car you want down to the last nut and bolt is fine, but don’t let details cloud your judgement. Know where the rot spots are, and learn how to appraise whether a car is in good condition for the price displayed. With a few exceptions, it’s easier (and cheaper) to buy a bodily sound car with a bad engine, rather than vice versa.

Past restrictions (around coronavirus) mean that many auction houses, online or brick and mortar, will live stream their sales. If you can’t attend in the person, this is the next best thing – you can see the cars go through, listen to the process, and familiarise yourself with the costs involved (with that house’s terms and conditions to hand, but more on that later).

2. Set a budget, don’t go over it, understand the costs involved

Sarah continued: ‘Understand what your budget entails; it’s not just the cost of the car, it’s the commission, the VAT, the cost of getting the car home, and so on. [Transport] differs right across the board, [so does] commission. Check what the commission is, plus the VAT. The VAT is only on the commission; people think it’s on the whole amount.’

“Commission” can also be called as “buyers’ fees”; each auction house will have a breakdown of what everything costs, usually calculated as a percentage. There are “sellers fees” too, also under the “commission” umbrella: as a buyer, you won’t pay this, but the vendor will have had to pay to list the car in the auction. That’s not the only terms you’ll need to know, as point 3 explains.

3. Understand the terms and conditions, and language used in the auction hall

‘Listen to the lingo that they’re using, like “no reserve”, “provisionally sold”; understand what they mean so that you’re not standing there like an idiot’, said Sarah. ‘Understand what “no reserve” means; you’d be surprised how many people don’t [understand it]. If it sells, it sells, that’s it’.

Every auction house differs, and they will explain what they mean on their website, usually in their terms and conditions. ‘There will be terminology, terms and conditions that the auction house will explain; read them and make sure you’re clear,’ said Sarah.

So, you’ve registered to bid, and you’re bidding on a car, up to a price. What happens then?
A reserve price is the minimum the seller will take for the car (for it to sell). Sometimes auction houses (or sellers) will go for a “no reserve” sale to drum up interest in the car; it can sometimes work in their favour, as if a bidding war results, the hammer price is driven upward.

“Sold” doesn’t always mean ‘sold’, either. If a car doesn’t make reserve, there’s more work for the bidder, vendor, and auction house, to do.

“Provisonally sold” is a term used if a car doesn’t make the money that the vendor wants, but people’s hearing has been selective, on occasion. Sarah explained: ‘If you’ve made a bid, and [the car] is “provisionally sold” don’t go to the counter and get your wallet out, it’s not yours. The amount of people that do that […] the amount of people who hear that word “sold”, and they rush to the counter with their wallet out trying to buy the car…’

She continued: ‘The reserve is between the auctioneer and the vendor, the audience won’t know that; some people will ask, and you can try and find out, but you’ll get an idea from your guide price. Say for example a car has a guide of £10-£12,000 and it makes 8 [k] and yours was the highest bid, you’ll be told that the car has been “provisionally sold” to you.

That means a negotiation would have to take place with the vendor before it was sold. You’ll then ring the vendor and say: “It made 8, will you sell it?” They’d then go, “I could really do with 9” and you’d be back to the bidder to hope they meet somewhere in the middle.

That’s one of my roles at Evoke, I’m the negotiator, it can go on for days. I always give people overnight to think about it, some auction houses might say, “I’d need to know by the end of the day” but everyone’s different, I’d give them overnight and expect to hear from them by the following morning […] if you put people on the spot, they’re more likely to say “no.”’

If you are successful, there will be different rules concerning how you’ll be expected to pay for the car. ‘What deposit you’re paying? When [does] the car has to be paid for in full? When [does] it has to be collected? With the fall of the hammer, you’re in a contractual agreement’, Sarah confirmed.
Don’t dither: if you’ve bid on it, you’ve bought it.

Auction houses give generic descriptions so as to put the ball in the bidder’s court, so to speak. While there are legal avenues auction houses can pursue if someone doesn’t pay, there’s normally work going on in the background to contact underbidders if no payment is made; sometimes, cars can be relisted instead. On rare occasions, cars can be misrepresented, but those are legal matters outside of the scope of this feature, which cannot be taken as guidance or advice.

It boils down to trust, as Sarah stated. ‘It's [a case of] “buyer beware”, people need to go and look at the car, and if they’re not happy, don’t bid. Auctions houses have to trust their vendor [to make sure a car isn’t misdescribed],’ she said.

4. Look at the car – please!

This feeds into our first point. Viewing days are there for a reason – so you can look the car over before deciding if you want to take things further. Poke, prod, sit in, and start the car if there’s room.

Ask an auction house staffer if you can move it back and forth with the engine running; some allow it, some don’t. Catalogue listings (some are free, some are not) should tell you if the car has paperwork, runs, or is (or isn’t) roadworthy.

Sarah said: ‘Get there nice and early, if you don’t understand what you’re looking at, take someone with you, if you can’t get it independently looked at (most auction houses can help with this).’

What of online auctions, though? They’re the definition of distance selling, and you don’t want to bid from miles away online to find that the car isn’t as expected.

The differences, as Sarah said, can be vast; ‘Every vehicle stays with the vendor with us, others do have a compound and viewing days [similar to a traditional auction]; we would set up a viewing time between the vendor and the bidder.

If they’re willing to speak to each other – and, generally, they are, classic car people are nice – they can [otherwise] get on the phone and ask as many questions as they like (including videos).’
Most online auctions will have a video and a raft of photos to go with [the listing].

5. Paperwork, paperwork, paperwork!

This may come as a shock, but many first-time (and even seasoned) auction buyers don’t take service history and documentation as seriously as they should, in Sarah’s opinion.

‘Look at the paperwork!’, Sarah pleaded. ‘The number of people who don’t look at the paperwork and then realise [that there isn’t much history] is [surprising]. It’s a massive factor. Look at the service history, make sure it belongs to that car [as if it doesn’t, the auction house can ring the vendor to confirm], check it has a V5 [log book] and do some searching online […] you can find out so much online.’