WHY AUCTIONS CRISIS WILL HIT YOUR WALLET
Too many specialists are competing for the same sub-£10k cars – we reveal how it’ll affect the classics you’re buying
Asaturated UK market with too many specialists chasing the same cars is going to push up prices, classic experts predict. The increasing number of auction houses joining the market – and the record sale rates the larger ones are attracting – means that sellers are competing for the same stock, resulting in prices that increasingly match dealer and classified values. Classics Central is already taking a hiatus from auctions, citing market saturation as the reason. Auction analyst Richard Hudson-Evans says: ‘There are too many cars being chased and sought by too many auction companies. Nowadays, quite a lot of buyers are using an auction as a first port of call. whereas traditionally, it was a last resort.’
‘There’s far too much inappropriately-priced stock’
Experts are predicting a shortfall in affordable classics and subsequent price rices – and it’s all because of the saturated auction market in the UK.
Classics at the entry end of the market – particularly in the sub-£10k price bracket – are set to become a rarer sight because more sellers are turning to auction houses, which in turn are holding more sales. Both Brightwells and Historics have increased the number of sales they’re holding and on Saturday 25 March three new auction houses are hosting their inaugural sales.
Auctions are also attracting plenty of buyers, with this year’s selling rates remaining very strong. SWVA achieved a 99% sale rate in its latest sale, while ACA shifted 81% of its cars.
Classics Central’s managing director, Justin Lazic, is already feeling the effect of this crowded marketplace – his auction house is currently in hiatus. He says: ‘There’s far too much inappropriately-priced stock among the 15 major auction houses in the UK. And there’s too much price advancement on some cars with lack of history and high mileage.
‘The top end won’t be affected as there’s still plenty of good stock. But the lower to middle end of the market is suffering because too many cars are heading to auction.’
‘One example of this is the Jaguar XJS. A 5.3-litre convertible. An example in good condition is worth around £20,000. Smallerengined XJSs with higher mileage just aren’t worth the same, yet they still attract high guide prices.
‘Prices of some classics, especially those in the lower to middle price area, are not adequately reflecting sub model variations at the moment.’
Classics Central’s break from auctions will last for at least the first half of this year. Lazic adds: ‘It’s likely that three or four auction houses might drop out within the next six months.
‘This trend in recent years for 5% buyers’ premium is unsustainable. Auction houses that use these and 0% sellers’ premiums will go down by July.’
CCW’s auctions expert, Richard Hudson-Evans, agrees that this market is unsustainable. He says: ‘There are too many cars being chased and sought by too many auction companies. Fast Fords sell particularly well at auction, as do MGBs, and 1980s and ’90s BMWs.
JUSTIN LAZIC, CLASSICS CENTRAL
Nowadays, quite a lot of buyers are using an auction as a first port of call, whereas traditionally, it was considered a last resort.’
Another reason being tipped for the popularity of auctions is the ability to enter cars a matter of days before the sale. ACA has been known to accept cars the day before sale, and H&H consigns cars just days before its sale. Sellers can now place a car for sale, and if it doesn’t sell, place it in an auction that weekend.
However, club members will most likely remain unaffected, according to Chris Kynoch, PR & Social Media Officer of the MG Car Club. He says: ‘A lot of our members don’t need to sell through auctions. Classifieds in our club magazine typically feature around 20-50 cars for sale. Club members know each other well – and they enjoy buying and selling from one another. We don’t hold auctions even at an event like MGLive!.’
More and more owners of commonplace classics are turning to auction houses.