Pun­ters com­plain of in­con­sis­tency on sell­ers’ re­serves and es­ti­mates at UK clas­sic car auc­tions

Classic Car Weekly (UK) - - News Analysis -

A lead­ing author­ity in the auc­tion world has warned bid­ders that the cat­a­logue’s low­est guide price is not the same as sale’s re­serve price. The warn­ing comes as a re­sult of a num­ber of CCW read­ers hav­ing their of­fers re­jected, de­spite bid­ding to above the guide price.

Mar­ket an­a­lyst and col­lec­tor ve­hi­cle val­u­a­tions ex­pert Richard Hud­son-Evans has high­lighted in­creas­ing con­cerns that al­though sev­eral best bids made have been the same or higher than lower guide prices in auc­tion cat­a­logues, their bids have been re­jected by auc­tion­eers on sev­eral ros­trums as still be­ing in­suf­fi­cient. But, as our re­search has dis­cov­ered, there are no hard and fast rules – some houses al­low re­serves to be set within the es­ti­mates’ range, oth­ers set sell­ers’ re­serves be­low the low­est guide price.

CCW’s auc­tions com­men­ta­tor says: ‘Cus­tom and prac­tice has al­ways been that an auc­tion re­serve – the min­i­mum amount that an owner would ac­cept from the auc­tion firm for a con­signed mo­tor car – is con­fi­den­tial. How­ever, a punter’s bid that is the same as, or be­tween the lower and higher pre-sale es­ti­mate fig­ures, or above the guide price band pub­lished in the cat­a­logue, should se­cure the lot. But that isn’t al­ways the case.’

Nick Whale, man­ag­ing di­rec­tor of Sil­ver­stone Auc­tions lam­basts auc­tions that have re­serve prices higher than their lower guide price. He says: ‘For our auc­tions, you have to be able to buy the car in the es­ti­mated price range. That means if we’ve val­ued a car be­tween £10,000-12,000, and a bid­der bids £10,000, they will be able to get the car. If other auc­tion houses don’t em­ploy that tech­nique, they haven’t val­ued their car prop­erly.’

Ac­cord­ing to reader-re­ports from the field, some bids have been within auc­tion­eers’ pub­lished guide prices, but have not been ac­cepted. ‘Not quite enough, Sir,’ the auc­tion­eer an­nounces both to ‘live’ wit­nesses in the sale­room and, in­creas­ingly to the on­line pub­lic in cy­berspace. Of­ten they add: ‘Come and have a word with us af­ter­wards...’

Auc­tion­eers do have the right to de­cline a bid from any­one, and there is noth­ing il­le­gal about hav­ing a re­serve price higher than the lower es­ti­mate, or even the higher es­ti­mate. Richard asks: ‘Why are the come-and-buy-me es­ti­mate fig­ures, pub­lished in­for­ma­tion be­fore ev­ery sale, not raised above the con­fi­den­tial re­serve so that a bid within the guide price band ac­tu­ally buys the car?

‘The an­swer is that pre-sale es­ti­mate fig­ures are all down to the in­creased com­pe­ti­tion be­tween the var­i­ous auc­tion firms keen to sign up as many en­tries as pos­si­ble for more and more sales in the na­tional auc­tions cal­en­dar be­fore their com­peti­tors get there first.

‘As a re­sult, some ven­dors’ re­serves are too high for the cur­rent mar­ket. They have been set at­trac­tively low by the auc­tion firms to ex­cite bids, but do not re­flect the re­serves that the cars can ac­tu­ally be bought for.’

Justin Lazic, man­ag­ing di­rec­tor of Clas­sics Cen­tral, says: ‘No re­serve will ex­ceed the fi­nal lower pre-sale es­ti­mate an­nounced by us. But not ev­ery com­pany plays by these rules, and it’s one of the rea­sons I started up the busi­ness.’

An­other rea­son stated by some houses for re­fus­ing bids is that the ven­dor has in­creased the re­serve bot­tom line be­tween con­sign­ing the car and the day of the auc­tion – frus­trat­ing for the auc­tion com­pany and po­ten­tial buy­ers.

More of­ten, though, the power is with the bid­der: if po­ten­tial buy­ers do not agree with what is usu­ally a joint valu­a­tion ar­rived at by ven­dor and auc­tion­eer, then the over-es­ti­mated car will be un­sold, and the auc­tion house’s sale rate di­min­ishes as a re­sult.

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