The bustling world of auctions is awash with jargon that may confound those new to the game, not least in the vibrant car auction scene. These events, held at various locations, such as SCA auction locations in NY, serve as a testament to the thriving market, but navigating their intricacies can be a challenge without a sound understanding of auction terminology. This article aims to simplify this lingo, providing a glossary for beginners that demystifies the process.
Story Stages
Absolute Auction vs Reserve Auction
An additional cost to remember in auction dealings is the buyer’s premium. This is an extra sum calculated as a percentage of the final bid that the successful bidder must pay on top of the purchase price. Different auction houses use different percentages and sometimes these can be adjusted depending on the final price an item is sold for. For example, at a high-profile auction in New York recently, cars sold for over $100,000 attracted a buyer’s premium of 10%, while cars sold for less had a 15% premium. Bidders need to keep the buyer’s premium in mind when planning their budgets and working out the total cost of buying the item they want.
Appraisal
A valuation provides a professional estimate of a car’s worth or any other auction item’s worth. It factors in elements such as historical importance, rarity, state of preservation, and market demand. Automotive industry experts conduct valuations, offering a trustworthy estimate to guide both buyers and sellers in their decision-making process.
Catalogue & Lot
Every auction provides a catalog, a list detailing the items up for auction. A number in the catalog usually identifies each item, or ‘lot,’ in an auction. For instance, at a 2022 classic car auction in New York, Lot 42 – a pristine 1957 Chevrolet Bel Air – turned heads when it reached an unexpected hammer price of $150,000.
Hammer Price & Paddle
The hammer price is the winning bid on a lot, so named because of the tradition of the auctioneer bringing down a gavel to indicate the close of bidding. The paddle is the card or signs with a number that bidders use to place their bid. In the heat of the bidding moment, your paddle is your best friend, so don’t lose sight of it!
Proxy Bidding
Proxy bidding is a strategy employed by those who cannot or prefer not to attend the auction in person. The bidder entrusts the auction house to bid on their behalf, up to a specified maximum amount. This method was used to great effect at a 2023 classic car auction when an anonymous buyer secured a vintage Ford Mustang for a cool $200,000.
Sniping
In the context of online auctions, bidding at the last second or sniping is when a bidder makes a high bid, usually exceeding the highest current bid, just moments before the auction ends. This strategy is employed to prevent others from outbidding them. While some people think this is a clever strategy, others consider it to be unfair play.
Going on Sale
‘Going on sale’ is a term derived from the auctioneer’s action of using the gavel or hammer to signify the sale of an item. It is used to refer to items that are up for auction. For instance, in the realm of car auctions, a highly desired 1962 Ferrari 250 GTO, one of the most sought-after classic cars, famously went on sale and broke records by selling for a whopping $48.4 million in 2018.
White Glove Sale
A White Glove Sale is an auction term for a sale in which every single lot in the catalog is sold. These auctions are rare but they do occur. In a famous 2017 automobile auction, every vehicle from a private collection, including a 1970 Plymouth Superbird, was sold, qualifying the event as a white glove sale.
Knocked Down
When an item is knocked down, it means it has been sold at auction. It’s another term derived from the auctioneer’s use of a gavel or hammer, marking the end of bidding and the sale of the lot. It is, for the bidder, the thrilling culmination of the auction process.
Condition Report
A condition report provides a detailed assessment of the physical state of a vehicle being auctioned. It outlines any notable flaws, damages, or mechanical issues, allowing bidders to make informed decisions. Detailed condition reports are especially crucial for online auctions, where potential buyers may not have the opportunity to physically inspect the vehicle beforehand.
Provenance
Provenance refers to the documented history of a vehicle, including its ownership, maintenance records, and any notable events or modifications it has undergone. Knowing the provenance of a car adds to its overall value and can significantly influence the bidding process. For instance, a vehicle with a rich racing history or celebrity ownership often garners greater interest and commands higher bids.
Finalizing the Sale
Once the hammer falls and the highest bidder is declared, the process of finalizing the sale begins. The buyer is typically required to sign the paperwork, provide payment, and arrange for the delivery or transportation of the vehicle. Auction houses often have dedicated personnel to assist buyers in navigating this process smoothly, ensuring a seamless transition of ownership.
Post-Auction Services
In addition to facilitating the sale, many auction houses offer post-auction services to support buyers. These services can include assistance with vehicle transportation, documentation, and even restoration or customization referrals. Such services are particularly valuable for logistics businesses or individuals purchasing vehicles from afar, ensuring a streamlined experience from the auction floor to their desired location.
Conclusion
In conclusion, auctions are a complex dance of strategy and desire, where knowledge is key. By understanding the terminology, beginners can confidently step into this world, ready to bid, secure bargains, or acquire that much-coveted piece of automotive history.
Whether you’re a first-time attendee at one of the many auctions or an experienced bidder looking to refresh your knowledge, this glossary is an essential tool in the exciting world of car auctions.
