Selling a car at auction might be the purest expression of free market economics in the automotive world: people bid against each other for your car until it reaches the highest price the market can stand, leaving you certain that it’s achieved the true market value.
Well, that’s the theory, anyway. The reality is a bit more complex, but don’t worry; we’re here to help!
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Here’s our insider guide to selling your car at auction.
Why use an auction?
Using an auction is one of the easiest ways to sell your car, but it does come at a cost as you’ll have to pay the auction house a commission fee. This varies but it is usually around 5% (plus VAT).
Also, the final sale price might be a bit lower than that for a private sale. However, the reverse is also sometimes true, and if you get two people who both want your car you might end up with a pleasant surprise. On balance though, it’s the ease of use an auction house offers that should be the deciding factor.
For valuable classic cars, an auction house will help you prepare your car before advertising it widely to a targeted audience. In this instance, selling at an auction is probably the best way to maximise your return.
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Which auctioneer should I choose?
The obvious answer is to pick your local auction house. There are plenty dotted throughout the country and if you type ‘car auctions’ into Google it will list dozens and will also show a map with pins identifying the nearest ones to your home.
You’ll then need to have a look at their websites to find out if they deal in the sort of car you’re selling.
Most will sell a wide range of cars but might have specialist auctions for different classes of cars; ie, four-wheel-drive SUVs, new cars, classic cars, bangers, etc.
If you enter your five-year-old family car in an ex-fleet auction, for example, the sort of potential buyers you’re hoping for just won’t be there, so you won’t attract the level of bids you would if you’d targeted it more selectively.
Again, the exception to this local rule is for classic cars. If the car you own is valuable (over £15,000 as a rough guide) then you should try the big three specialist auctioneers first. They are Bonhams, Coys, and H and H.
How much will it cost me?
The rate of commission will vary depending on what you’re selling and how much it sells for. However, you should budget for around £100-150 as the entry fee, plus 5% (plus VAT) on the final sale price.
So if your car sells for £10,000 you will get £9,400 (£500 plus 20% VAT).
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Can I set a reserve?
When you first discuss selling your car with the auctioneer, they will probably ask for photographs of the car along with some details of age, mileage, service history and condition. They will then work with you to estimate how much they think the car is worth. This will help you set the reserve price.
If bidding on the car doesn’t reach this level, then the car won’t sell. However, if the bidding price is close to the reserve price, you will normally be asked to meet them in the middle. It’s always worth considering this but it is entirely up to you whether you accept.
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What else do I need to do?
You’ll need to get the car to the auctioneer, of course. Most will arrange collection but you might like to save money by delivering it yourself. After all, hopefully it’ll only be a one-way journey…
Preparing your car for auction is a lot like preparing it for sale anywhere else. That means:
• Washing and polishing it thoroughly. This is one occasion when you might find it worthwhile to pay a professional car valet to do the job for you.
• A recent service will give the buyer confidence in the car and reassure them that there won’t be any extra to splash out for a few months. As a minimum, top up the oil, coolant, and windscreen washer fluid.
• The same goes for an MOT; if your car needs one then you should arrange a new one as buyers will see this as an independent, third-party assessment of your car’s condition.
• Classic cars should always have a full MOT, even if they are exempt. Nothing encourages first-time buyers to bid like a full MOT on a nice, shiny classic!
• Photocopy any service history and leave it in a cheap folder inside the car. Again, this will go a long way to reassuring potential buyers that your car is a safe place for their money. Give the originals to the auctioneer.
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Being there on the day
You don’t have to be there on the day. Having said that, it’s a good day out and it might be handy to be available to answer any questions about your car. This is probably more applicable to classic and rare cars than modern, mainstream models.
There have been reports of potential buyers temporarily disabling cars they are interested in the hope that they will be able to buy them at a lower price. This isn’t at all common but if you are worried you could always turn up to the auction a couple of hours early to keep an eye on your car. (The interference tends to happen at the last minute in the hope that there won’t be enough time to mend the car before it enters the auction hall.)
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What will happen on the day?
The auctioneer will announce your car, describing it fully. This is where your earlier conversations with the auctioneer will pay dividends because it is in their interest to realise the best possible price too by pointing out all the good bits.
Your car will then be driven into the auction hall, or ‘ring’ as it’s colloquially known, and bidding will start.
The auctioneer may ‘bounce bids off the wall’ initially. This just means that they will continue the bidding even if only one person is actually interested. This isn’t illegal or as immoral as it might sound because your car won’t sell unless it reaches the reserve price anyway, so they are only trying to generate enough interest in it to reach that price. Hopefully this will trigger a bidding frenzy, leaving you amazed at the high price your beloved car has just sold for!
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After the sale
The auction house will contact you by phone or email to tell you whether your car sold or not, and if so, how much it went for. They will then arrange to send you a cheque or to pay the money – minus their fees - straight into your bank account within the next five to 10 working days.