The best way to show how the digitalization can change the classic car market is with a real life example. We will look on two recent auctions for the same car model, the same year, the same colour, similar mileage. One was offered in a traditional auction, the second in an online auction.
The car has been sold in both auction, the traditional auction house RM Sotheby’s sold the car at the Palm Beach auction on 26th of March 2020 for 137.500 USD including the buyer’s fee (although not including the VAT from the buyer’s fee). (auction link)
The online auction platform Bring a Trailer (BaT) sold the same car only 8 days later on 3rd of April for 140.400 USD including the buyer’s fee. (auction link)
The results are looking similar and in fact when you include also the VAT from the buyer’s fee and for example the other fees like for bidding onsite or the storage fee for a couple of days, you will end with almost the same final amount to pay.
So as a buyer you would think, there is no difference where to buy the car from. And in this case and you would be probably right.
But for the seller, this almost same result makes a huge difference!
The seller at RM Sotheby’s receives the final price excluding the 10 % buyer’s fee, but also a 0 to 15 % negotiable seller’s fee. As this was not a No Reserve auction, but also not a really cheap car, from our experience, the standard seller’s fee for such a car would be also 10 %. That leaves the seller with 112.500 USD and minus the transportation costs for bringing the car to the auction.
But the seller at BaT receives the final price excluding the in this case maximal buyer’s fee of 5.000 USD and a flat 99 USD seller’s fee. That leaves the seller here with 135.301 USD and without any transportation costs, so the seller gets more than 23.000 USD more in the online auction!
And this is a difference of more than 20 % from the value of the car! This is one the main reasons of where the future of the classic car market is… The digitalization of the market gives more fair and more transparent value to the buyers and sellers. There is no need to pay high fees and so the market can get even more flexible and more liquid with the lower fees.
We will compare other auction sales of similar cars in the future in a column Battle of the auction platforms…
Author: Auctomobile Team