Selling at auction or as a commission sale? Comparing two options This note aims to compare two options for selling a classic car - selling at auction with a leading classic car auctioneer or selling using a commission sale arrangement with a specialist trader. Of course another popular way of selling a classic car is through a car for sale advert in a commercial or club magazine or online site and that is touched on below. The two cases examined alongside look at the costs and the benefits for the seller in each case. Those benefits are not only financial but also come from useful services provided by the auctioneer or specialist trader: marketing and displaying the car, avoiding buyers rolling up at your house tyre-kicking, avoiding the stress of preparing and marketing a classic car for sale and ensuring safe payment is received and handling documentation to complete the sale. Auction charges The charges vary between specialist classic car auction houses but are a substantial cost for both buyer and seller. There can also be additional fees, for example for a larger mention in an auction catalogue rather than a single entry, so those need to clarified with the auction house selected to handle the sale of a car. Auction charges - example at Barons Other classic car auctioneers may have higher charges, but see the Barons' website for further details of their charges: Buyer's Premium is 10% plus VAT on the premium, minimum of £150. Seller's Commission is 5% plus VAT, minimum of £150. A seller's commission of 5% is the lowest auction houses are likely to charge and many will charge more. Which route will reach a buyer prepared to pay a good price? - that's a key question The key question for a seller is which selling option will reach a buyer prepared to pay a good price and which option will best suit a seller. A popular choice for a seller is to advertise their car and handle the preparation and display of their car they have to be prepared to handle visits from possible buyers to inspect and test the car. See more below. Advertising a car for sale This is the route usually used for selling a classic car and there are plenty of places to do so. They include placing an advert in trade and club magazines and posting an advert with online sites like Car&Classic or eBay. The V8 Website offers cars for sale adverts which have proved to be a very effective way to offer an MGV8 for sale. More Adverts on the V8 Website The V8 Register offers "cars for sale" adverts on the V8 Website comprising a classified advert with a linked A4L PDF twin column document where a full set of photos of the car plus the text describing the car can be displayed. We offer advice on how to draft an advert and we also have a regular updated MGV8 market review and price guide to assist you. See the link below. MGBGTV8s for sale adverts MG RV8s for sale adverts Buy an advert MGV8 Price Guide update Last update to the end of April 2019 released early in May. More Buying a selling advice on the buyinganmg.com website It's a website packed with useful information and advice. www.buyinganmg.com Where to sell an MGV8? See our 5 page article on the selling routes available. Which selling route you choose will depend on your aims and your situation. The article describes how someone selling an MGV8 can approach the task and choose a route which best suits them. More Posted: 190728 & updated: 190801 Selling at auction . Comparative assessment of the benefits for the seller using a sale at an auction with a leading classic car auctioneer Gain visibility in the auction brochure Placing your car with a reputable classic car auctioneer will see your car listed in their auction catalogue and mentioned in their online listing ahead of the auction. Gain visibility in the auctioneer's publicity Your car will be included in the auctioneer's online listing of entries several weeks ahead of the auction date. Frequently the classic car press report on forthcoming auction listings - for example Classic Car Weekly - so useful publicity for the sale of your car will come from that. Auctioneer can advise on pricing your car The auctioneer can advise on setting an estimate price or estimate price range in their catalogue, and any reserve price requirements (minimum sale price) the seller might wish to have can be discussed and agreed. Auctioneer can advise of drafting the text for the car in their auction catalogue This needs to be drafted carefully to be an attractive read but accurate covering the type of car, when produced, the mileage, condition of the car, service record, age of the tyres, number of previous owners, parts replaced and any modifications or extras that have been fitted. Auctioneer can take a set of photos of the car A good set of photos, particularly when your car is advertised available online, will help potential buyers view the the car in detail and form a view as to whether they will make the effort to travel to the auctioneer to make an inspection of the car and then attend the auction itself. Auctioneer can provide telephone bidding facilities This convenience can be helpful for some buyers. The necessary arrangements to set up an online telephone facility for a bidder will need to be made ahead of the auction and an agreement exchanged covering the terms and conditions of the arrangement. Trader can suggest vehicle inspectors should a bidder seek help Buying a classic car at auction without a careful inspection ahead of the bidding is essential. Where a bidder does not feel competent to inspect a car then they will need to engage a suitably qualified and experienced inspector to make the inspection and provide a report. Suggested vehicle inspectors are mentioned on the buyinganmg.com website. Inspectors There is also a checklist on that website of key areas a potential buyer will need to examine when inspecting a car prior to bidding. Checklist 2 Auction involves live bidding at a moment in time Whilst a car listed for auction will be required to be available at the auction site for short period before the auction - in some cases there are special viewing days - the process of selling is between the auctioneer and bidders. When the hammer comes down the sale is made provided the final bid is above the reserve or meets any other prior conditions. Where a reserve is not met the auctioneer's team will usually discuss the case away from the auction room with interested bidders and discuss any offers they make with the seller, usually by telephone, or in person if the owner of the car is also attending the auction. In many of these cases an agreed price is reached and a sale is made through the auctioneer. Sales rates at auctions A recent piece in Classic Car Weekly indicated the recent proportion of cars selling at auction was around 62% overall. Where a car does not sell at auction the seller has to retrieve the car promptly and then reconsider options on how best to sell their car. Commission sale . Comparative assessment of the benefits for the seller using a commission sale arrangement with a specialist trader Gain visibility in a trader's showroom Placing your car with a specialist MG trader on a commission sale basis will have your car well prepared and on expert display in their showroom to get a good exposure to buyers over several weeks or longer. Staff with a specialist trader usually know more than most about a particular car and can speak authoritatively about the features of the car and service matters. Traders offering commission sales Gain visibility in a trader's advertising Your car will feature on the "cars for sale" stock on their website and selectively in their adverts in club and commercial magazines. Benefit from any introductions of serious buyers that are known to the specialist trader In the course of their business specialist traders are often aware of potential buyers who are looking to buy an MG and can introduce commission sale cars to them. Costs of a commission sale are set out Leading traders offering a commission sale service will have a standard agreement setting out their role (usually on a sole basis), the display period, costs, the duties of the seller and of course the fee and payment terms. The trader will advise on the value, give the car a full workshop inspection and prepare the car for display. Sample agreement Benefit when a car has been previously serviced by the trader Where your car has been regularly serviced by the trader, they will have a good knowledge of the condition and maintenance record of the car, so they will be able to market the car well and with confidence. Trader will check and prepare your car for display to customers Your car will be checked and prepared for display. Those checks could be a routine service, an MOT test, or checks to reveal any defects that need attention before the car is offered for sale by the trader. Those additional services will be invoiced separately by the trader. Trader can advise on pricing your car A specialist trader can provide advice on how to price your car based on condition and mileage. Our MGV8 price guide will also helpful. Market review & price guide Trader will have insurance The trader will have insurance and trade plates for demonstrating the vehicle and test driving by potential buyers. Seller can avoid the hassle of dealing with buyers Many classic car enthusiasts prefer not to have buyers visiting their homes to inspect, test drive and haggle for their car. Engaging a specialist MG trader can transfer that role for a commission - usually as a "success only" fee. Specialist trader has an incentive to negotiate a good price with a buyer The greater the selling price the larger will be the commission fee so the trader has an interest to work to get a good sale price for you. Trader will handle the sale payment and necessary documentation The trader will ensure the sale is handled well, safe payment is made and received, the V5C and other documentation is dealt with correctly and the handover or delivery of the car is made once the payment is cleared and received. Any delivery charge will be a matter to be agreed between the trader and the buyer. Comment Trader activity at auctions Traders of various types are frequently seen at classic car auctions bidding in their subtle ways and many of them are looking for a car which they might be able to buy at a price lower than might be expected and then shortly after the auction they will be able to offer it for sale at a higher price. A profitable "uplift"! Some of our Pricewatch NEWS items have reported prompt "price uplift" cases! Some traders offer those cars through good looking adverts or on their websites and some in seemingly "top end" showrooms. It's not unknown for traders to discuss lots on auction day and mention which they are keen on and by implication or agreement get fellow traders to resist bidding on the lot. Their aim is to reduce rival bidding and secure an attractive purchase price with their bid so they pay less than might otherwise have been the case. Condition of a car Whilst good auction houses do try and ensure cars listed for auction are accurately described, many specifically state they have no responsibility for the description of the car as it may well have been provided by the seller. They usually stress a thorough inspection of the car should be made before bidding on the car and that any car is bought as seen. Clearly there is scope for a seller to have a "convenient oversight" when it comes to describing their car. Frequently an emphasis on originality can overlook modifications, not least that a chrome bumper conversion has been carried out on an MGBGTV8 which was originally a rubber bumper model. Unless bidders have a close knowledge of VIN numbers (rubber bumper MGBGTVs came in at VIN 2101) they may be unaware of the original status of a car or its trim and body colour. Auction is a decisive moment with a car offered for sale A clear advantage of offering a car for sale at an auction is a bid over any reserve will sell as the hammer falls. There is no lengthy period of advertising and an endless stream of enquiries from possible buyers and visits to inspect the car. When a lot comes up at an auction the sale of the car begins and is usually settled in a matter of minutes. Online auction sites are growing Several online auction sites have appeared in the last few years and their internet reach may be an advantage but serious bidders will need to make a physical inspection of the car before closing a purchase based on a bid made on an online auction. Bonhams MPH classic car auctions Bonhams MPH has been launched a new and innovative branch within their company. It is based at the motoring heritage centre at Bicester, their publicity says they "will provide industry leading marketing for every lot, ensure a better customer experience, achieve the very best sale price possible, and charge realistic and transparent fees. Their auctions will take place at the celebrated centre of automotive excellence, Bicester Heritage, and we encourage all our clients to visit our on-site offices and experience the hub of historic motoring. Our charges are competitive: seller commission at just 5% plus VAT and buyers premium at 12.5% plus VAT". More Comment Condition of cars offered for sale A responsible specialist trader will not be prepared to sell a substandard car - for example one with worn kingpins or brake lines - and will want the seller to agree to have any necessary work carried out to get the car in an acceptable state to offer it for sale in their showroom. As a trader offering a car on a commission sale basis they are acting as an agent for the owner who is the seller and, whilst the liabilities a trader would have with sales of cars from their own stock may not generally arise with commission sales, the reality is a leading MG specialist would not want a substandard car in their showroom. They will regard their reputation as vital even when handling a classic car as a commission sale. Traders' interest in offering commission sales Not all specialist traders are enthusiastic about commission sales but clearly there is an advantage in that the trader does not have the financing burden of funding the stock cars in their showroom that are there on a commission sale basis. Auction option may be the better option for a prompt sale Sometimes its better for an owner to accept a lower sale price than to have the costs, delay and expense of refurbishing a car for sale through a commission sale or a sale managed by the owner through an advertisement in magazines or online. In such cases selecting a classic car auction as the route for selling a car has advantages. Seasonal factor in selling a classic car Interest in buying classic cars tends to be more active in the months from May to October because enthusiasts interested in getting a car may well be inspired by seeing cars they like on display at club and classic car meetings and from seeing more cars out on the road as enthusiasts tend to drive them much more in the Summer months. So the likelihood of an enthusiast responding to a classic car advertised for sale or on offer with a specialist trader or listed for auction tends to be greater in Summer months. Some auctions do involve a considerable journey from areas where most classic car enthusiasts are located. For example the trip to the reputable Morris Leslie auctions near Perth can involve a journey of 350 miles taking 7 hours each way from the Midlands.