I’ve attended hundreds of collector car auctions. I’ve bought classic cars, sold them, and at various times possibly even made some money. There is no one way to do it right. Anyone who says so either doesn’t know what they are talking about or is intentionally trying to misdirect you.
Let’s talk about an essential element at an auction: the bidder (in other words, you). If you have never been to an auction before, you probably think it happens just like in the movies or on television.
In America you can pretty well forget the casual tug of an ear or the bidder pointing to his chin to get the auctioneer’s attention. There is very little subtlety going on when it comes to actual bids, but there are plenty of mind games behind any potential bidding style and philosophy. With that in mind, here is a list of tips that will help you to bid like a pro even if it’s your first time out.
- Do your homework.
Never, ever arrive at the auction block without having examined the car or truck you are about to bid on. Have you ever heard the phrase “restored for auction?” Those cars are sucker bait for people who haven’t examined what they are about to buy. Bright, shiny, often red paint, and a clean convertible top looks fantastic on any car from 50 feet away. You can’t see the rust, you can’t see the salvage title, and you sure as hell can’t see the problems you would have discovered if you’d had a closer look. The missing radio that is going to cost $1,500 to replace, those worn seats and carpets, even the incorrect motor look great when it’s a red blob under bright lights, especially if you have been bidding with the help of auction juice. It’s also a good idea to actually attend an auction before bidding at one so you have an idea of how the process looks firsthand.
- Be careful with the auction juice.
Did you ever wonder why drinks are free and free-flowing for bidders at most auctions? Just like casinos, auction companies know that more booze leads to more bucks. Alcohol has a wonderful tendency to make you think that you are at least a bit smarter than you think you are, if not the smartest person in the world. And guess what? Despite your high IQ and dashing good looks, there is probably someone who knows more about the car you are bidding on than you. And that’s alright. Just don’t let inexperience, overconfidence, or alcohol cloud your vision.
- Meet the auction staff. They are there to help you.
No, really. At many auctions you will find what are known as bid spotters. At an arena sale, they might be stationed hundreds of feet away equipped with a loud whistle and a flag to let the auctioneer know you are interested in buying. Here’s a tip you might not have thought of: You can always find a bid spotter or even someone who works for the auction company and tell him or her you are interested in bidding on a particular lot beforehand. That way, if the car comes up and it’s in your price range, he or she will know to look out for you.
Other people who can help include the guys who drive the cars on and off the block, and certainly the auction office staff. Well before the car is driven up to the block, ask to see the file on the car and if there is anything else included in the sale (spare parts, hardtop, extra set of wheels). If you make a friend, they can even tell you information that only they know, such as the real reason the seller is letting it go or how desperate the seller is to make bail. That sort of thing can be helpful to let you know if the car is actually in your price range.
- Know your bid limit.
It’s kind of important to know how much money you have to actually spend on a car. The simple reason is that you can’t pay for more than you can afford. More complex reasons include divorce, a hangover, or just feeling like an idiot.
A good start is to check price guides (or consult an expert) regarding the car you’re interested in. Then, determine what your ideal limit will be. After figuring that limit, you might want to just set that maximum price for yourself and then set a realistic amount that you can go over if that is the car you really, really want. Let’s say you give yourself a 10 percent overage. That’s an easy one, and if you can’t figure out what 10 percent of your maximum bid is, you probably shouldn’t be bidding at auction.
- Know the fees.
Speaking of 10 percent, that’s the typical fee that you will have to pay on top of the bid amount. That’s called the “buyer’s premium,” and it’s paid directly to the auction house. In some cases, that fee can be more and in some cases less. Whatever it is, find out before the auction starts and factor it you’re at your bid limit. Generally, the auction house takes a cut from both the buyer and the seller, and these fees are non-negotiable. Don’t forget that in many states you will have to prove you are shipping the car out of state, or you will be responsible for paying sales tax in that state as well.
- Watch the dealers.
It’s entirely possible you will wind up bidding against people who buy and sell cars at auctions professionally. These people are generally called dealers. Keep in mind that buying and selling cars is their business, and they are going to be better at it than you. That might sound bleak, but you have a secret weapon: To stay in business, they have to be able to buy at a price low enough that they can make money on the cars they buy. You don’t have to do that, so you can theoretically pay a little more. See? You’re becoming an auction pro already. I like your style.
- Choose the right bidding style.
There are hundreds of ways to bid on a car. Some people like to place the first bid, showing the auctioneer they are interested in the item. Some wait to jump in until near the end when the bidding slows down. Some people like to be loud and exuberant, waving their bidding paddle high in the air. Some do it more discreetly once they have the auctioneer’s attention.
The auctioneer is in control of the auction, which also means he is in control of the bid increments. Occasionally you’ll be able to bid half the amount of that expected increment. For example, if you want to make a $1,000 advance into $500, you can call it out ($27,500), make a chopping motion with your hands or by mouthing the words. Auctioneers generally hate this, but remember: You aren’t trying to make a friend, you’re trying to buy a car.
Also, be aware of psychological tricks other bidders will play, such as raising the bid higher than the current “call” or dropping out of bidding only to reemerge at the last minute. Bidding can be more of a chess match than you imagine, and we’ve seen things get way out of hand with two dogs fighting over the automotive Milk-Bone.
- Have fun.
Bidding on a car at a car auction should be fun, exciting, and even exhilarating. It’s better to be calm and wait for the next opportunity to buy a car than get caught up in the moment and overpay. And don’t be frustrated if you’re not the high bidder on the car you wanted. Remember, deals are like trains; there is another coming down the track soon.
- Don’t forget there is always a deal to be had at an auction.
If you go searching for one particular car out of 500 at a big sale, there is a really good chance you are going to come home emptyhanded. But if you expand your horizon and go with the type of car you are looking for instead of one particular car in mind, you have more potential for finding something you can bring home. There are some who claim the best deals happen at the start of the auction or near the end when the audience has dwindled. In the age of Internet bidders, that seems to be less of a factor.
Don’t forget you can also bid on the phone. There is at least one well-known dealer who often leaves the room before the car he is looking for comes on the block. He’ll be bidding at the bar on his mobile phone while enjoying some auction juice of his own, and only he and the auction company knows he’s buying.
You don’t have to be the smartest guy in the room to wind up with a great deal on a great car. Sometimes it happens because you are one of just one or a very few people interested in that car.