News

Monterey auction week thread

Discussion in 'Vintage Ferrari Market' started by Timmmmmmmmmmy, Jun 30, 2019.

  1. gcalex

    gcalex Karting

    Aug 16, 2010
    89
    So the Auburn car was not-sold at a listed $430k; with premium, I think that is $478k; against a low estimate of $525k.

    While Auburn is probably not a good venue for a Daytona, nevertheless, it seems that the trend of over-estimating Daytona values is holding... :)

    Admittedly, 78k is a fair number of miles, and the car looked like it had a variety of hap-hazard aspects to it, but it seems reasonable to assume that at $478k, none of the tradesman saw any money left in this driver.

    Of course, you only have a market if someone is willing to buy, and someone is willing to *sell*, so the recent no-sales does not mean that decent cars can be had at those low figures. Would have been interesting to really go over the Monterey and Auburn cars and see if they really were needy in ways that would make the bids reasonable.
     
    Timmmmmmmmmmy and TTR like this.
  2. TTR

    TTR Formula 3
    Silver Subscribed

    Mar 29, 2007
    1,915
    Riverside, CA
    Full Name:
    Timo
    By now, I assume no explanation will be forthcoming.
     
    Timmmmmmmmmmy likes this.
  3. technom3

    technom3 F1 Rookie
    Silver Subscribed

    Mar 29, 2007
    3,687
    Phoenix AZ
    Full Name:
    Justin
    Sorry I missed your reply.

    It is all pyschology and momentum.

    Why have an auction? Why dont the auction houses just park cars in a parking lot with for sale signs on them with the price it takes to buy the car.

    It is a different format. It often generates a greater sales price on a hot item. Ego can come into play and people won't want the other guy to get the car so the price goes up.

    Now not opening at the reserve allows momentum to build and go PAST the reserve.

    Also... At almost every single auction I run my car(s) I have my reserve price much higher than my actual take it home price. I do this so for q multitude of reasons and I'm not the only one.

    In other cases it gets the auction house time to work the seller to make the seller realize that truly is ALL the money and to cut the car.

    Opening at the reserve price would be very very boring. Opening lower gets people interested at a low price who may not have committed to the car or a bid until they thought it was going to cheap. Once they engage people tend to hang on longer and give it an extra bid or two. Sometimes this makes ALL of the difference
     
    TTR, sperry and Timmmmmmmmmmy like this.
  4. technom3

    technom3 F1 Rookie
    Silver Subscribed

    Mar 29, 2007
    3,687
    Phoenix AZ
    Full Name:
    Justin
    I forgot to ad... Auction houses only get paid when a car sells. And auction houses get paid more when the car sells for more.

    They know what they are doing and that this generates the highest dollar amount typically.

    And that you are paying them a percentage means you are on the same team. The more they sell it for the more they make. Interests are aligned.
     
    TTR likes this.
  5. TTR

    TTR Formula 3
    Silver Subscribed

    Mar 29, 2007
    1,915
    Riverside, CA
    Full Name:
    Timo
    Thank you for your attempt to explain, but it doesn't seem to address my original question about logic or lack thereof and practicality of opening or submitting bids below (secret) reserve.

    If (secret) reserve with “It is all psychology and momentum” bidding methods were known/proven to be effective for achieving better/higher results (as you seem to suggest), why wouldn’t auctions (who “know what they’re doing”) use same on all lots ?

    I would think no-reserve or opening bids at reserve, even if high, would offer more competitive and exiting (= less boring) auctions when bidders involved know from the beginning they actually have a real/serious chance to win the lot.
    And if no bids are offered at higher, i.e. reserve opening, no time wasted on childish theatrics or utterly meaningless/useless “high bid” results reported on no-sale lots.
     
  6. Prancing 12

    Prancing 12 Formula 3

    May 11, 2004
    2,251
    The long way home
    His explanation perfectly explained the practicality of opening or submitting bids below reserve - to engage more bidders, build momentum from those bidders as they 'buy into' the process and to use this momentum and competition between bidders to carry the bidding beyond the reserve price.

    The same efforts aren't required on all lots. Some lots have enough interest where the opening bid is serious from a real buyer and some require the chandelier to get things going. It's up to a good auctioneer to read the room, know how to open the bidding and to control where it goes from there, whether that's working individual bidders, controlling bid increments, etc.

    Well, first of all, you can't really expect an auction house to (successfully) implement a no-reserve policy, can you? That would be suicidal to their business!

    Secondly, open all lots at the reserve price eliminates any chance for any momentum to build. You seem to disagree with that concept, but anyone who's bought or sold at an auction (or hell, even watched an item on eBay) knows it's real and likely the biggest contributing factor to successful auctions.

    Without the "theatrics", a seller is no better off at an auction and might as well just slap a "for sale" sign on their car and wait for the phone to ring.
     
  7. technom3

    technom3 F1 Rookie
    Silver Subscribed

    Mar 29, 2007
    3,687
    Phoenix AZ
    Full Name:
    Justin
    Well said and THANK YOU.

    To TTR. Perhaps your mentality (I do not mean that as an insult) is not suited for auctions. In other words... You seem very rationale and not what would be referred to as an emotional buyer. If you identify with that... The auction set up is "not for you" and will likely never really make a whole lot of logical sense to you.

    It is all about emotion and getting that little extra out of the bidders. If you are a I'm bidding to x kind of buyer then yes it will seem like a big waste of time.
     
    sperry, turbo-joe, TTR and 1 other person like this.
  8. miurasv

    miurasv F1 Veteran

    Nov 19, 2008
    6,927
    Cardiff, UK
    Full Name:
    Steven Robertson
    #283 miurasv, Sep 4, 2019
    Last edited: Sep 4, 2019
    With no chandelier/auction house bids allowed, to achieve the said momentum to get genuine bids on a car, I don't see anything wrong with just starting an auction at a lower price than the reserve, which I fully agree should be in place to protect all concerned. To be more in line with the actual spirit of a genuine auction, if potential auction bidders were secure in the knowledge that all bids were real, then car auctions may attract more potential bidders because of it, rather than the current situation, where potential genuine buyers/bidders stay away from these auctions because they know they could very well be the only genuine bidder who is bidding against the chandelier/auction house.
     
    TTR likes this.
  9. TTR

    TTR Formula 3
    Silver Subscribed

    Mar 29, 2007
    1,915
    Riverside, CA
    Full Name:
    Timo
    Fair enough, I guess.
    And thank you all, technom3, Prancing 12 & miurasv for sharing your views.

    While some of it still doesn’t make sense (to me), with further consideration of your replies, I can see some logic and practicality from a sellers point of view, but not necessarily that of buyers or auction houses.

    Using my perhaps flawed or skewed viewpoint, I could easily see an auction house benefiting from implementing no reserve policy on every lot as it would guarantee each one selling. How could that be “suicidal” ?
    I would think they'd rather sell and receive percentage from every lot, even if individual prices realized were to be less than some consignors hope for .

    OTOH, I could also see no reserve policy discouraging some consignments, especially those with some profit expectations to be protected (hence insisting for pre-agreed reserve).

    I also have a hard time believing “theatrics” are the reason why any car would sell better or easier at an auction than privately.

    Why do we hear so many top-tier cars selling privately (and presumably without “theatrics) and often for more than their piers at auctions ? Or are these just gossip and rumors with no resemblance to reality ?

    Like I mentioned somewhere earlier, I've seen unexpectedly high prices realized at no reserve auctions, merely because there were 2 bidders desiring same lots and on one occasion I was in the room observing 2 of the consignments reaching these unexpected results, which both happened to be my restorations and done to level of quality previously unseen on type of cars in question. No "theatrics" required, just quality products (although my view on latter is perhaps biased ;)).

    P.S. No one really needs to answer the questions I posed above, as they are mostly rhetorical at this point.
     
  10. Birel

    Birel Formula 3
    Silver Subscribed Owner

    Sep 12, 2005
    1,513
    Brisbane
    Full Name:
    Andrew Turner
    On holiday in Sri Lanka recently I went to the 4 am fish market auctions. It works in reverse and there is only one bid, which is always the winner. The vendor starts the bidding at say 100, if no hands go up he moves down to 95, and so on until there is a sale. It usually takes just 3 or 4 bids and there is no war between 2 or more bidders. The psychology at work is: "I must put my hand up now or I lose my ONE CHANCE at success" Truly fortune favouring the bold and very fascinating to watch the fast action. Probably the only people who could make that work with cars would Be Russo & Steele !
     
  11. 375+

    375+ F1 Veteran
    Silver Subscribed Rossa Subscribed

    Dec 28, 2005
    6,167
    A Dutch Auction, you might run it by Drew and see what he thinks?
     
  12. 19633500GT

    19633500GT F1 Veteran
    Rossa Subscribed

    Nov 9, 2010
    5,878
    Connecticut
    Full Name:
    Ken S
    You never know. Maybe someone out there is already developing a website or app to perform car auctions just like this...

    :)
     
  13. swift53

    swift53 F1 Rookie
    Rossa Subscribed

    Nov 17, 2007
    4,484
    E.S.
    Full Name:
    Alberto
    I still consider that car auctions are dreary unless something FANTASTIC, is on the line, but then if that were the case, what happened to private deals?
    Loved it when one would waltz in at the best dealer in Rome or Milano, and all sales were private affairs.
    There was a time when Ferrari, etc. (fill in the blank....) were sold out of (small car lots), around L.A.
    with price tags on them, and haggling was fair game. Italy, was great at that.

    If only had not bought a brand new Alfa GTV, could have had the pick of almost the best, but then, driving around Italy in a smoking heap?
    Ahhh, if only.

    Auctions were for fine art, mostly...and also mostly invited, very elegant, snobbish and serious attendees, not a fly was heard,
    not what might be today's alcohol loaded affairs. All bidders, or even the auctioneers, sounded like James Mason.
    Strictly Dom Perignon, but still got dragged to a few, got bored to death, and was not much more more than a child, with a tie...:)

    Regards, Alberto
     
    SCantera and roma1280 like this.
  14. TTR

    TTR Formula 3
    Silver Subscribed

    Mar 29, 2007
    1,915
    Riverside, CA
    Full Name:
    Timo
    Thank you for posting this.

    In past few days I’ve spared few thoughts on this concept which I imagine being a very old tradition:and perhaps in use with all kinds of other trade around the globe.

    I can easily see logic and practicality of this format in any conventional/physical auction, including ones for classic/exotic/specialty vehicles, but just like with those, only way to make better or full sense of it (at least to me) would be to eliminate or prevent potential use of (secret) reserve on any offered lot.

    Not only would this then (at least in my mind) eliminate necessity or need(?) for chandelier trickery and other silly theatrics, it would also seem to support interests of the house and any bidder or consignor with serious intentions to make a conclusive transaction, all while pretty much guaranteeing highest achievable price for the offered lot at that day/event.

    And depending on desirability of the lot, auctioneer could open at 50%, 25% above or even at high estimate and the bravest/most serious bidder* would win promptly and establish a real (market) value for the item, instead of some imaginary/made up number the auctioneer might’ve pulled out of thin air, but for some odd reason is reported as “high bid” and even more oddly, somehow regarded as current value for that lot or some kind of (market) benchmark for similar items.

    *Unfortunately though, just like any bid in conventional auction format, the one & only (i.e. winning) bid in this could also come from a shill for the house & seller, therefor not necessarily reflecting true (market) value of the lot.
    OTOH, chances of shill bids in this format would seem far less likely.

    While I’m not sure how applicable/practical it would be for online auctions, I wouldn't be surprised as much as I am that something like this has not yet been already introduced or commonly (and successfully ?) used by anyone with a physical venue.
     
  15. gcalex

    gcalex Karting

    Aug 16, 2010
    89
    One comment that I would add is that both "well bought" and "well sold" situations are by definition deviations from "market correct," and generally, deviations from the market are a result of unusual time-pressures, and/or incomplete information.

    Sellers (and thus, the auction houses) are obviously looking for "well sold," and consequently, are looking to create the impression of such time pressures (motivating starting bidding below the reserve)(this is Psychology 101; "hey, I'm winning, and now I don't want to lose *this exact instance of the game*") and preserve a condition of incomplete information (make it unclear whether there are real bidders, what is the reserve, what is the exact condition of the vehicle, etc...).

    One could start at some crazy high number, and work down, but who decides what classifies as "crazy"? Look at the occasional cars that go for way above high estimate; seller is not going to like giving a bargain to the guy who is fastest with the paddle, or that the auctioneer happens to see first...
     
  16. Prancing 12

    Prancing 12 Formula 3

    May 11, 2004
    2,251
    The long way home
    The Dutch Auction format is essentially what every optimistic seller (dealer or private) is doing by listing their vehicle with an "asking price"; start high and work downward with offers from buyers. It may not be as linear as the auction format, but the notion is the same.

    Based on 19633500GT's post, it would seem there's more than one venture trying to get this format to market...
     
    Timmmmmmmmmmy likes this.
  17. Atombender

    Atombender Karting

    Apr 6, 2012
    167
    Germany
    Full Name:
    Alex
    Bit late ;)

    Hard to believe believe that the bidding on 4131GT stopped at $9.4m. The last ever open headlights California...which later regular Ferrari model had an open/covered headlights option? Massive overall drop at RM compared to 2018, a whopping -34%, lowest since 2011. Less than 60% of lots sold as well.

    Most annoying thing about the auction is that just because this super-spec F1 sold for nearly $20m, every YouTube doofus now thinks that all the other F1's are also worth $20m.

    I also don't get current F40 values but maybe that's just me.
     
  18. Timmmmmmmmmmy

    Timmmmmmmmmmy Formula 3

    Apr 5, 2010
    2,039
    NZ
    Full Name:
    Timothy Russell
    In regards to your comment on the F1 sale, its worse than that, FB twittering classes claim that ALL F1s are worth $25 million at least, they have proof and RMs car was sold too low. Crazyness
     

Share This Page