Total: €4,161,600 Hammer: €3,600,000 Commission: - First 900k at 16% with 20% VAT = €172,800 - Balance of €2.7m at 12% with 20% VAT = €388,800. This amounts to $4.6m or £3.5m.
So if the buyer is from the EU or US, you still need to add some taxes as i understand. Might be as high as 19.6% if France?
As Karim posted earlier, VAT is due on the fees. Hammerprice probably just applies standard fees for in-app calculations and doesn't account for this in their prices posted. A US buyer will not have to pay VAT on the price of the car, but VAT will still due on the fees, as it is a service rendered in France. This would be the same for any buyer, regardless of where they're based. A European buyer would have VAT due on the price of the car as well.
I understand why Hammerprice would omit this from their calculations and on most cars it's immaterial. But when we're talking about a $4m F50, in the name of accuracy, it's good for all participants here to know.
If you are a US buyer, the car would not be subject to a sales tax when you register it in whatever states imposes a sale tax on used or new cars?
Possibly (but likely not; see MT LLCs ) The point was, no buyer, regardless of where they're from, was leaving without paying any less than the €4,161,600 (US$4.6mm) as indicated by Karim and not the $4,485,857 that Hammerprice indicated.
Prancing 12 clarified it nicely and Joe Mansion expressed a shared belief on charging so much commission. Let us look clearly at: I. What one pays to get the car ‘ie buy it’ from the auction place (what the car sold for), and II. What other costs/taxes are required to bring the car to another jurisdiction (country) and to register it. I. What the car sells for (i.e. cash out of the pocket of the buyer at the auction). This is made of three parts: A. Hammer price (€3,600,000) B. Buyer’s premium or commission (€468,000) - 19% on first €900k and 12% on balance of hammer price for Artcurial C. Sales tax or VAT (value added tax) on the commission charged by the auctioneer in the local jurisdiction where the sales takes place. In the UK, and all over the EU it is 20% or very close. In France where the auction took place its 20% and hence 20% of the Artcurial €468,000 commission is €93,600. So the buyer gets a bill of A, B and C totalling €4,161600 of which €3,600,000 goes to the seller, €468,000 goes to those on the auction’s podium (or the owners behind them), and €93,000 to the government of where the auction is taking place. The inefficiencies are staggering: why pay €561,600 (namely the commission of €468,000 and the tax of €93,600) so 620 thousand dollars to buy a car in a show and where you cannot even thoroughly inspect inside, out, and under a car. When I see dealers wanting to buy with such cost base (eg GTO in previous auction and aim of buying some at Artcurial), then they will add their large margin on top, say 300-400 thousand dollars, as they placed their own capital, then you get a million dollar thrown in the air for a show and a dealer snuggly thereafter saying within nice settings ‘that is the best - trust me’ and the hapless rich guy coughs up this extra $1m for no value-added whatsoever. (Note any refurbishment or re-fresh to the car could have been done directly by the new buyer to the car via the numerous specialists around). Alternatively, the same car could have been bought through a dealer with a 5% commission plus VAT so 6% in total (in our €3,600,000 example, you will pay an extra (€216,000 instead of the €561,600) and less if you find facilitators or you go direct to a seller or buyer. Now the second part, namely you take this F50 and it should be free to go to the EU, say France, and be registered there at no cost. However a rule in the EU says that if a car is below 6,000 km then it is deemed ‘new’ and hence the excise and import duty is to be repaid if it goes from one EU country to another. So to register that F50 anywhere in Europe you will need to pay 20% of you purchase cost, so around €800k (or drive it from 1,300km to 6,001km and then import it free of any taxes). Same fees of 20% to bring the F50 to the UK as the UK left the EU (except if you leave it bonded in the UK for 4-5 years then you pay nothing but cannot register it and after 4-5 years at the 30th anniversary of the car’s delivery, the 20% reduce to 5% Bringing the F50 to the US is cheap: 2.5% import, no federalisation costs, and state tax for registration - a couple states have zero state tax). Voila!
All points well made Karim. Perhaps the only one to revisit is the assumption that the Seller received the full hammer price of €3.6 million. Knowing how egregious the fees were in this auction, it is likely that there was also a Seller's Fee, which means the Seller netted up to 10% LESS than the Hammer Price, with the difference being pocketed by the auction house. The broader issue you raised though, which is that when all is said and done, the total value of the fees and expenses to legitimately register, service and restore this F50 is astronomical, is right on mark. That being said, here's to wishing the new Buyer well. Hope he enjoys this F50 in good health.
Absolutely right. I did not know whether Artcurial also go after the seller like their US counterparts do.
