Auctions: Would car's "value" include commissions and fees?

At auctions such as Barrett J, RM Sotheby's, LBI Ltd, and such..

..how much, what's the %, generally speaking, is added to the hammer price for Auctioneer's commission and fees? Does it vary a lot?

I'm negotiating a private sale of a rare car. The seller and I are both looking at comparables. A very close comp was recently auctioned for US$28,100 by Sotheby's "including commission and fees". I guess my seller can argue that those costs are part of the buyer's total cost to acquire the car, and that cost is part of the value of the car - so $28,100 is fair asking price...

..That seems logical, but no one adds the buyer's cost of shipping it home... plus insurance, or other "soft costs"?

Honestly, $28k would not stop me from buying it, but $25k isn't being unreasonable either. We are not arguing, we are just being as honest as we can.

I'd love to know what typical 'commission and fee' percentages are, and or any examples where commission and fees are NOT considered part of the "value" of the car..

Like... in Hemmings Muscle Machines - their Auction Results column shows Bid values as a market indicator - and I don't think that includes comm & fees.

Thanks for your thoughts.
- Art

Auction comps generally charge 8-10% to both buyer and seller.

Buyers commissions seem to be around 10% these days. Sellers commissions can vary depending on if the seller opts reserve or no reserve.
Another 5-10% for the “house”.
Then there is generally a listing fee to put the car in the auction to begin with. $500-1500 is typical.
Factor in transportation and hotel fees for the buyer to get the car there, and stay in the auction city.
Hard to see how many sellers are left with any money after the car sells!

What Mastershake says. I've looked into it on a car of mine, and that's what I came away with.
Plus transport, and any damage, food, lodging, fuel...and time, too, if you want to supervise your car.
It's easy to incur $3000-$4000 in costs to sell that car through an auction.
And if the guy wants a reserve, and the house charges for that, more $$$.
Obviously, without a reserve, the sale price depends on who's there & if anyone's hot for the car.

Resellers who buy from auctions generally figure in all the fees before they bid. That way they can estimate their potential upside for a future sale.

Is a car that sells for $20K all in at an auction really a $20 K car on the used car market? I would say no.

American Car Collector Magazine announced in the current issue that this issue is the last issue, Their business model seemed to be selling ad space to auction houses. Their revenue stream seems to have dried up rather quickly.

another # to look at is the seller's net $ figure at an auction

$30,000 hammer price
$33,000 buyer pays (hammer + 10% buyer's fee)
$27,000 seller receives (after 10% seller's fee) - any additional consignment fees

$6,000 auction fees + any additional consignment fees

seller & buyer will both have costs associated with transportation, lodging & registration to attend the auction

after a good auction weekend, the seller is going to end up with $25K in his pocket for his $30K collector car!

So the seller sold a $25k car and the buyer bought a $35k car. Same car, lol.

I have a cousin that's a realtor, maybe she ought get into auctioning cars off, seems that's where the money is.

^^^ Exactly. The better realtors used to do pretty well, too, but it was occasionally hard & complex to get deals done.
Think about 3-6% on 250-600K for example for realtors.
Haven't played with property in a while, could be a skinnier deal now.

Big auctions are practically printing millions on the cars they're rolling across the block.

And meanwhile someone with a clapped out slant six 64 Dart that needs more in sheet metal than it'd be worth fully restored wants $10k for his scrap pile because he knows what it's worth.

Thanks - yeah, this is the math that has me all ??? scratching my head...

..at the end of the day, the hammer price is IMHO the value..

- Art

^^^^^^^ i call that "barrett - jackson" disease.
lots of that local.

I think the simple perspective is the cost of the car in one column and the cost of the marketing / transaction in another column. The value being based on what yer buying - yr, model, options, condition, history - what a reasonable person would pay. The cost of marketing, be it auction fees or ebay fees has absolutely nothing to do with how much the car is worth, it's the amount somebody is willing to spend to find a buyer.

BJ results are the last place I'd look for determining actual real world value. Way too many deep pocket buyers trying to fill up vacant space in their cavernous garage. see also: more money than brains. There's also the issue of finding enough comps to get a feel for the market. Easy enough if you're looking at Vette or a baby Bird because there's always a ton of them. Maybe 1 or 2 70s Dodge trucks go through that tent every couple years.

Auction prices are usually way more than the cars value. If you did not see the car that was auctioned in person, then you cant go by the pictures for condition. Pictures lie, big time. Condition and rarity set price mostly. If I were buying a car, I would not let auction prices determine my offer price. I would research it through a lot of sources. Hagerty is one. At the very most, I would use the selling price of the vehicle (hammer price, not the % commission on top) as my upper range. My initial offer would be lower. You can always come up on your offer price. Cant go down. If you want the car no matter what, then kind of a mute point.

..exactly - the car I'm negotiating for is rare enough that only one was on the open market last year, in VGC. It bid up to $38k, but didn't meet Reserve. The one I'm looking at has been mostly sitting two years, ran once last summer, dirty, a few issues, needs TLC but solid and an excellent starting point for my purposes. Now, it just so happens that one of these models with very similar qualities (solid and intact but distressed) was auctioned last week. The bid result was $28,100 incl all fees and commission. So I'm thinking the seller walked away with about $25k ----> 10% less than $28,100. And that's a decent comp value.

- Art

Fair market value and willing to pay is more about what feels right to you based on what you know about the condition of the vehicle and what you generally know they trade for. Obviously vehicle specific and bank book dependent.

I think Hagerty is probably a worse source for realistic guidance than BJ / Meecum / etc. based on their focus on high end collector cars. One recent example is a thread on another forum about the price estimates they put on RamChargers. They picked up on one or two extremely nice ones selling for more than top dollar and decided that's where the market for them is now and oddly enough all it's done it's get the facebook clowns excited about how their $8k rig is suddenly an $16k rig. Like that matters.

I think a better approach, though maybe counter to my argument is cost to build. Could I buy a basket case project or decent runner and get it to the level of what this guy is selling for less money than buying his. This being said as I dump more money in to my RC than I could buy a nicer one for and transport it.