Why Aussies are gambling on car auctions
An increasing number of Aussie drivers are taking a risky chance on their cars which can lead to some seriously expensive trouble if the warning signs are ignored.
You’ve not driven the car nor seen it in person, there’s no consumer protection or cooling off-period and the seller’s a complete stranger.
Yet here you are, about to bid thousands of dollars from your smartphone or computer.
What mug would buy a car in such a way?
Well, I have.
As have thousands of other Australians. Digital car auctions have boomed, proving we’re prepared to buy practically anything online.
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These car auctions are on-the-smartphone convenient and – key to their popularity – thrilling.
Aussies love a punt, and the idea of snaring a bargain or a longed-for vehicle from the comfort of your own home is the new addiction for car lovers.
Spontaneous bidding, often of an evening with drink in hand, has led to many unplanned purchases and awkward explaining to the other half.
New online auction players have recently launched, specialising in classic, collector’s, rare and exotic vehicles.
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Their number includes Collecting Cars (co-founded by Top Gear’s Chris Harris), Trading Garage, Seven 82 Motors and Chicane Auctions.
These cater specifically to enthusiasts, so it’s on these you can window shop a 1970 Holden Monaro GTS 350, 1924 Rolls Royce Silver Ghost, 1-of-432 1972 Ford XY Falcon 4x4 ute, or desirable moderns like a Toyota GR Yaris or Porsche 911 GT3.
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These sites aren’t to be confused with older established online auctions like Grays, Pickles and Manheim which sell thousands of cars under the hammer, typically ex-fleet, ex-government and ex-rental “everyday” cars, plus repossessions, write-offs, and unwanted dealer trade-ins.
The above typically have basic descriptions, average photos taken in a warehouse, and numerous old clunkers you shouldn’t touch with a barge pole.
The newbies do things differently.
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Collecting Cars uses a professional photographer to get hundreds of highly detailed images and videos, then allies them with an informative write-up on a car’s history and condition.
Interested bidders can contact the owner to ask specifics, and arrange an inspection.
And while traditional online car auctions sometimes don’t reveal the sold price, the new guys know it’s vital to ensure return visitors.
Enthusiasts check in most days to see the final price of that old Mercedes, Mini Moke, Land Rover or Lamborghini.
Dammit, that sold for a bargain … missed my chance.
Collecting Cars’ Chief Executive, Edward Lovett, said online-only auction sites like his allowed sellers to “reach further and faster” to car enthusiasts.
Australia was the UK site’s first overseas outpost and has a physical team based in Sydney. “We’re car people at the end of the day, and there are people to speak to,” said Lovett. “If you listed on eBay, you’d find it near impossible to speak to a human.”
Collecting Cars has produced podcasts, organised coffee runs and aligned with owners’ clubs – things car folk like.
It’s about trust building; key in the somewhat risky world of car auctions.
It’s working. The company’s Australasian sales results last month exceeded $7.3 million from 102 auction lots.
Its global platform has sold more than 20,000 lots (vehicles and licence plates), with total sales exceeding US$1.2 billion ($1.8 billion).
Sellers pay no listing fees nor on the final sale price, but the buyer pays a 6 per cent premium on the winning bid for cars, or 10 per cent for parts and plates, plus GST. Minimum fee is $2200 and maximum is $12,100.
Private plates have proved the biggest ticket items. Two-digit NSW plates pop up on Collecting Cars, with “55” fetching most at $1,625,000.
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However, an Australian buyer bought an ex-Rod Stewart 1997 Ferrari F50 for almost £3 million ($6.24 million), then promptly imported it back to Sydney. “We only made £6000 ($12,500) on that sale,” Lovett said. “The likes of (auctioneer) Bonhams would have charged £450,000 ($935,000) in buyer’s commission alone.”
Lovett acknowledged there are risks when buying at auction; there’s no warranty or consumer guarantees as (usually) given by licensed dealers. But he suggested it’s no different to private car sales.
“There’s a risk element when buying privately, and as with all cars, have some caution,” he advised. “Our auctions last seven days, most cars come with 100 to 150 photos, you can ask specific questions to the buyer and arrange to have the car inspected.
“Our professional photographers alert us if something (about the car) doesn’t feel right or if the seller asks not to have a particular photo taken. This mitigates a huge part of the risk in buying a car online.”
Lovett said reserve prices are set realistically or they won’t take on the vehicle, and they use AI to spot and block any dodgy activity such as shield bidding where a bid is placed on behalf of the owner to artificially inflate the price.
With post-bidding dollar results immediately available for all to see, these new enthusiast auction sites prove thousands of Aussies are prepared to take the gamble on a cherished ride.
My extra bit of advice? Clear bids with your partner first. Otherwise, as I found, you’re asking for forgiveness rather than permission for that new toy in the driveway.
Originally published as Why Aussies are gambling on car auctions
