Monterey Car Week offers insight into classic car auctions

Workers set up a NSU Sport Prinz of Workers set up a NSU Sport Prinz of 1968 from the collection of Prince Albert II of Monaco at the Automobile Museum in Monaco. (July 24, 2012) Photo Credit: AP

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The answer is: Concours d'Elegance, Quail Lodge, Concorso Italiano, Pebble Beach, Bonhams, RM, Mecum, Gooding, Russo & Steele.

The question is…What are things associated with Monterey Car Week?

To many classic car aficionados, Monterey Car Week is the highlight of the year. It is not a single event in a single location. Rather, it is a series of events in some of the most spectacular locations anywhere in the United States -- or the world, for that matter -- all of which are located on California’s beautiful Monterey Peninsula. This year the event runs Aug. 12 through Aug. 18 and includes everything from the casual “Cars and Coffee” to the formal Pebble Beach Concours d'Elegance.

There are many other events planned for the week, but what attracts many of the flock that will descend onto this spit of land that juts out into the Pacific Ocean are the auctions.

Top names in the classic car auction business -- including Gooding, Bonhams, Russo & Steele, Mecum, and RM -- will all hold auctions during this week. They will have spent the previous year corralling some of the world’s finest, rarest, and most expensive cars in an attempt to draw bidders to their event rather than those of their competitors. Undoubtedly, new world record prices will be realized for individual cars, and the consensus is that the event as a whole will likely set a record for total sales exceeding last years figure of $260 million, a record that bested the previous years record of $197 million.

Most readers will not be firing up their private jets and heading off to California next week. Even so, auctions are still a popular place to buy collector cars. I often find myself at auctions buying cars for both myself and my customers, many of whom are overseas. For those of you who have never attended a classic car auction, let me try my best to describe what it’s like.

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This is an example of a sale at the type of collector car auction that most enthusiasts attend. To get an idea of what it’s like at one of the Monterey auctions, simply insert the words “million dollars” in place of the words “thousand dollars.”

Imagine this. In the short span of several hours you will search through hundreds of collector cars trying to find one that interests you. Assuming that you do find one, you probably won’t find its owner, so forget about asking any questions about the car. And since you can’t ask the owner any questions, you can’t ask for permission to thoroughly inspect the car. You can also forget about test-driving it. Don’t even ask (if you could). The best that you can hope for is to have your mechanic give the car a thorough visual inspection.

At some point, you will probably get to meet the owner, and hear the engine run. Unfortunately, that will be when the cars auction number is called and it is driven up to the auction block. This is not a good time to talk to the owner. Often, you will see the owner trying to maneuver several tons of steel through several layers of flesh and bones, while people are crowding around the moving car asking questions such as “Do the numbers match?,” “Is it the original paint?,” “How does the transmission shift?,” “Why are you selling it?,” “Does it come with the stuffed tiger in the back seat”? 

Finally the car arrives at the auction block. The auctioneer begins by barking out “Who will give me $50,000 for this fabulous piece of American automotive history?” No bidders. The auctioneer tries again. “O.K., who will give me $40,000?” Still no bidders. The auctioneer tries again. “Ladies and gentleman. I sold a car like this just last week for $45,000. Surely I can get an opening bid of $40,000.” No bidders. The auctioneer will ask for an opening bid and somebody will raise their paddle, bidding $10,000. Now the fun starts, and things begin to move really fast. The auctioneer will announce “I have $10,000, who will give me $20,000, $20,000, $20,000, O.K. $15,000?” An unseen person bids. “I now have $15,000, who will give me $20,000?” Another person bids. “I now have $20,000, who will give me $25,000?” A paddle goes up. “I now have $25,000, who will give me $30,000?” No bidders. “Can I get $27,500?”

For some strange reason several people are bidding furiously on a car that they know virtually nothing about, except that it is shiny. For the privilege of buying this car, not only do they pay the auction price, they also pay a bidders fee (typically $50 - $500), and a buyer's premium (typically 5% - 15%). Usually the complete process takes three minutes or less. Now they have to figure out how to get it home. Sometimes you get lucky and sometimes you don’t. The more that you know about the car, and the more that you understand the auction process, the more likely you are to get a deal.

Next week we’ll discuss some of the things you’ll need to know before buying at an auction.  

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