Auc­tions v deal­ers part 2

In the sec­ond in­stall­ment of our two-part in­ves­ti­ga­tion, To­tal 911 delves into the world of auc­tion houses and spe­cial­ist deal­ers to find out who’s best when it comes to sell­ing your Porsche

Total 911 - - Contents - Writ­ten by chris Dear­den Pho­tog­ra­phy by iris Dear­den

To­tal 911 in­ves­ti­gates: which is the best av­enue to go down when sell­ing a Ne­unelfer?

Like all re­tail ther­apy, buy­ing a used Porsche 911 should get the blood pump­ing. It’s a good kind of stress – ex­cite­ment and per­haps a lit­tle ner­vous anx­i­ety all rolled into one. How­ever, it’s un­likely the same can be said when the time comes to sell it again. The tyre-kick­ers, the no-shows, the joy-rid­ers and the in­evitable ridicu­lous of­fers can make sell­ing your car a grim and frus­trat­ing ex­pe­ri­ence. It’s prob­a­bly not sur­pris­ing that so many of us en­list the help of oth­ers to do the job.

Spe­cial­ist deal­ers and auc­tion houses are two of the most com­monly used meth­ods. Hav­ing ex­am­ined in the pre­vi­ous is­sue the pros and cons of buy­ing

911s via each of these routes, to­day we’re turn­ing the spot­light on the sell­ers. We wanted to look at what you can gain, and what you can lose, by the choice you make. Sil­ver­stone Auc­tions are again mak­ing the case for the auc­tion houses, with the spe­cial­ist deal­ers rep­re­sented by Paragon Porsche in East Sus­sex, and Suf­folk’s Paul Stephens.

Vis­it­ing Sil­ver­stone’s Race Retro auc­tion for the day, we asked op­er­a­tions man­ager Harry Whale pre­cisely what hap­pens when some­one con­tacts Sil­ver­stone with a 911 they might be in­ter­ested in sell­ing at auc­tion: “We ask for pho­to­graphs and full de­tails, which are ex­am­ined by our in-house val­u­a­tion com­mit­tee, and if we are con­fi­dent at this point that we would be happy to sell the car we go back to the ven­dor to dis­cuss a re­serve,” he says.

“If they are happy with this we go to see the car to ex­am­ine it and re­view its prove­nance. If we are still happy, we will hope­fully sign an agree­ment with the ven­dor. Then we do the pho­tog­ra­phy, and write a script based on the re­search and the prove­nance, which is agreed with the ven­dor. Then the car goes on the web­site, which gets over a mil­lion hits per year. Four or five days be­fore the auc­tion the cars ar­rive on site and the auc­tion hall is pre­pared.

“The re­serve is made in con­sul­ta­tion with the ven­dor. Guide prices and re­serves need to be re­al­is­tic and ac­cu­rate, be­cause peo­ple will not travel to see a car if the guide price is too high. If a car is val­ued at £100K on the spe­cial­ist re­tail mar­ket, then our guide price might be £80k to £90K. Af­ter the ex­plo­sion in prices of the last cou­ple of years sell­ers’ ex­pec­ta­tions are sky high, which is fair enough, but you have to start at a re­al­is­tic level.” Whale ex­plains: “A per­fect ex­am­ple was our 2015 Porsche Sale. We had the first Uk-de­liv­ered Flat­nose. It was es­ti­mated at £150K to £170K, which was too high, and it didn’t sell. The

owner put it up on the re­tail mar­ket for a year at £180K and it still didn’t sell, so he brought it back to our Clas­sic NEC Mo­tor Show sale with an es­ti­mate of £100K to £120K, and it sold for £212K. That lower es­ti­mate was a ‘come and get me’ es­ti­mate, which at­tracted four or five se­ri­ous col­lec­tors, and be­tween them they de­cided it was worth over £200K.”

So the ques­tion re­mains, why should an en­thu­si­ast look­ing to sell their 911 come to an auc­tion house rather than a spe­cial­ist dealer? Whale again of­fers us an ex­pla­na­tion: “Sell­ing at auc­tion is a call to ac­tion. If you put your car with a dealer you have no idea how long it might take, but with an auc­tion you know it is go­ing to hap­pen on a fixed date. You will be ex­pos­ing your car to a world­wide au­di­ence – we sell a lot of cars to Europe, to the USA, to Aus­tralia – and we only charge a 5 per cent fee to the seller. We have built up re­la­tion­ships and a level of trust with sell­ers, who might sell their whole col­lec­tions with us. We un­der­stand that the pro­ce­dure might seem a bit daunt­ing if you haven’t done it be­fore. We’ve got a car in this auc­tion that has had one owner since 1995, and he has got re­ally emo­tional about sell­ing it, but we have tried to hold his hand through the whole process.”

Of course, the ven­dor’s per­spec­tive is only one di­men­sion of the story. In the auc­tion hall, owner Peter Pen­fold ex­plained his rea­sons for choos­ing to sell his im­mac­u­late 1986 Car­rera Su­per­sport Targa in the day’s auc­tion. Giv­ing the body­work a fi­nal pol­ish, he ex­plained that hav­ing re­cently ex­panded his col­lec­tion he had sim­ply run out of space.

Need­ing to make room quickly, the auc­tion of­fered him the cer­tainty of an out­come to­day. The car had a guide price of £47K to £52K, but the ham­mer went down later at a sur­pris­ingly low £41,800 – above the re­serve, but be­low the £50K Peter was hop­ing for. With the 15 per cent buyer’s pre­mium the buyer paid £48,070, and Peter re­ceived £39,710. Taken to­gether, Peter’s sit­u­a­tion and the Flat­nose men­tioned by Harry seem to neatly sum up the pros and cons for the seller at auc­tion: the time and place of the out­come can be vir­tu­ally guar­an­teed, but the fi­nan­cial out­come can­not. It can be a dis­ap­point­ment, as in Peter’s case, or a very pleas­ant sur­prise, as the Flat­nose owner found out.

Mean­while, there are two dis­tinct routes to sell­ing through a spe­cial­ist dealer. The first ap­pears to re­move all un­cer­tainty, in­volv­ing a straight sale to the dealer who then en­sures the car is up to their re­quired stan­dard be­fore putting it into their show­room. It may take some time be­fore a buyer is found, but that’s the dealer’s prob­lem, as the seller gets their money as soon as a price is agreed. This ap­proach, rep­re­sented for our pur­poses by Paragon Porsche, seems very at­trac­tive for sell­ers. But deal­ers are in busi­ness to make money. They will know how much they hope they can sell a car for, so will only of­fer a fig­ure that al­lows them to build in a suit­able mar­gin. The more they an­tic­i­pate hav­ing to spend on get­ting a car up to sale stan­dard, the lower the pur­chase price they can of­fer.

Read­ers of last is­sue’s find­ings may re­mem­ber that af­ter ex­am­in­ing pic­tures and de­tails of Peter Pen­fold’s Su­per­sport, Paragon felt they would prob­a­bly re­tail it at around £75,000. So how much would they have of­fered Peter for the car? With huge caveats about hav­ing to phys­i­cally see the car, Mark Sumpter, owner of Paragon, sug­gests a fig­ure of around £60,000. This is over £20,000 more than

“Some peo­ple pre­fer a straight cash pur­chase, while oth­ers don’t mind wait­ing and get­ting a larger re­turn when their car sells”

Peter re­ceived from the auc­tion, and I’m al­most hop­ing he never reads this ar­ti­cle. While it would be un­re­al­is­tic to ex­pect a sim­i­lar sce­nario with every car bought by Paragon, Mark com­ments that own­ers are of­ten sur­prised by how much Paragon are pre­pared to of­fer for re­ally good cars. But Ja­son Shep­herd, part of Paragon’s sales team, tells me that they have to re­ject a sig­nif­i­cant per­cent­age of cars of­fered to them be­cause of the cost of ren­o­vat­ing or restor­ing them. “Ev­ery­body al­ways un­der­es­ti­mates the cost of do­ing this prop­erly,” he laments.

I ask Ja­son why he feels a seller should come to Paragon first. “We are nice peo­ple, we un­der­stand the mar­ket for their type of car and we will be the best trade buyer of the best air-cooled 911s. We are straight­for­ward and we like to do busi­ness in a trans­par­ent way. We will show them where we will spend money on their car and pre­cisely how we get to our ex­pert opin­ion of their car’s value. Once agreed, all monies will be put straight into their ac­count while they are here, and we will deal with all the an­cil­lary ad­min for them.”

The sec­ond route to sell­ing through a dealer is known as a con­sign­ment sale, and in­volves ar­rang­ing for a dealer to sell your car on your be­half. This re­moves the pri­vate sale frus­tra­tions men­tioned ear­lier, but in­volves the dealer charg­ing you a fee or a per­cent­age for a suc­cess­ful sale. Re­al­is­ti­cally, the con­fi­dence in­spired by buy­ing from a dealer with a good rep­u­ta­tion, and of course the war­ranty in­cluded, means that a higher price is likely to be achieved, which should lessen the pain of the dealer’s per­cent­age. Paul Stephens Porsche of­fers this ser­vice, though it is also happy to pur­chase your car for cash. I asked Paul which he and his clients pre­fer. “It de­pends on in­di­vid­ual cir­cum­stances. Some peo­ple pre­fer a straight cash pur­chase as they get their money straight away, while oth­ers don’t mind wait­ing – and prob­a­bly get­ting a larger re­turn when their car sells.”

Paul charges £5,000 or 10 per cent of the sales price, whichever is higher. He points out that out of that he has to pro­vide the same mar­ket­ing and com­pre­hen­sive war­ranty as he pro­vides for cars he buys in. Paul is also will­ing to of­fer a com­bi­na­tion of the two ap­proaches, with some money paid to the seller up-front, and a fur­ther amount de­pen­dent on when the car sells and at what price. Paul stresses that he will al­ways try to ex­plore with a po­ten­tial seller which ap­proach will work best for them.

So which sale route should you choose? An auc­tion can guar­an­tee the date you will sell, but not the amount re­ceived. A con­sign­ment sale pos­si­bly gets you a larger re­turn, but no guar­an­tees of when. And a straight sale to a dealer guar­an­tees the amount and the date, but with prob­a­bly smaller re­turns. If I were in the for­tu­nate po­si­tion of hav­ing a 993 to sell, which would I choose? My heart would love the ro­mance and un­pre­dictabil­ity of an auc­tion, but I know how I’d feel if I ended up bid­ding farewell to a much-loved, much-pol­ished Porsche for sig­nif­i­cantly be­low my idea of a fair price.

Based on the con­ver­sa­tions I’ve had here, a straight dealer sale would have the great­est ap­peal, for me at least, for its fast and se­cure out­come. If a dealer couldn’t of­fer as much as I had been hop­ing for, I would try a con­sign­ment sale, with the Plan B that if it didn’t sell in three months I could al­ways go back to a straight sale. In ef­fect, I’d be look­ing to max­imise the chance of the high­est re­turn while min­imis­ing un­cer­tainty.

But that’s just me. Take the time to talk with the peo­ple men­tioned here. All are straight­for­ward and ap­proach­able, all will be keen to help you de­cide the best route for you and all will en­sure you avoid the dreaded tyre-kick­ers!

Above With an auc­tion, the date of sale is guar­an­teed, but the fi­nan­cial out­come is not

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