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Can Cheap Be Expensive?
By Ton from The Collectables – May 15, 2024
Online Car Auctions vs. Traditional Auctions
We often get asked whether buying at auctions is really a wise choice. Auctions are trendy and seem like a great sales and purchasing channel for dealers, but recently, they've also become popular with private individuals. The reach is vast, there's no hassle or endless bidding, and often (in the case of online auctions), the car can stay with its owner. Most importantly, the turnaround time is short. This is especially true for online auctions. Traditional auctions tend to have a much longer lead time, both in terms of sourcing and marketing, and are usually physical events.
What Matters Most: Photo Gallery, Service History, and Condition
Selling and buying at auctions depend on the clarity of the information provided. A brief listing with just mileage, year of manufacture, a few accessories, and about 10 photos doesn’t say much. This might be enough for an average ex-lease car, but a detailed photo report with at least 100 pictures of all relevant (and sometimes irrelevant) details, along with a clear description of the car’s condition, can give excellent insight into a car outside the usual range. If the history of ownership and maintenance or damage records are included, you get a complete picture on which anyone can base their valuation. Most of the time, you can find all the necessary information online to support the story.
Everyone wants a car with no damage history, maintained to the last mile, and ideally from the first (Dutch) owner. If it's a special model with low mileage, it’s "perfect."
Unfortunately, such cars are rare. Not in sales and not in auctions. These cars are often cherished by their owners, who either don’t want to sell or want the highest price.
On the other hand, there are cars that have had many owners recently and have an unclear maintenance history. This is often evident from large gaps in (or absence of) maintenance records, tires with an old DOT code, or budget-brand tires (plenty of tread, but little grip). They’re usually nicely polished and look good from a distance, but fall short on closer inspection.
Auction Preview & True Cost: When "Cheap" Turns Costly
For these cars, the viewing day, offered by most auction houses, is the perfect opportunity. The buyer can assess the car in person. If the price is right relative to the expected costs, it may not be a bad purchase at all. The issue is often that the owner (if not a dealer) has a completely different price in mind. Thanks to the internet, it’s easy to form a price estimate.
We were recently offered a car where the owner expected at least 120-140k. That’s what most “average” models were selling for. A quick inspection revealed that: a) the color wasn’t original, b) the engine ran but leaked a lot of oil, c) the underside had significant rust in places, d) the paint thickness couldn’t even be measured in some spots, e) the mileage was already quite high, and f) the necessary maintenance had been done, but nothing more (despite all the “overhaul” invoices). It’s a nice car to look at and even to drive, but restoring it to a neat classic would require a serious investment. For a handy person it might be a profitable challenge, but as an investment it’s not ideal, as a high-mileage car will eventually require a lot of money. In short, if the car sells for half the expected amount, that’s already a good result.
What I’m trying to say is that a well-maintained car may sometimes seem expensive, but it often pays off in the long run. The new owner simply needs to continue the careful maintenance, keeping the car in good condition, and that will be reflected when the car is eventually sold.
Real-World Examples: Dark Rush Collection & Porsche 930 Turbo
We regularly auction genuine gems, cars from true enthusiasts who have taken great care of them. Last year, we auctioned the Dark Rush collection. All cars had low mileage and were serviced annually at the dealer. Preventive maintenance, such as replacing connecting rod bearings (a known BMW issue) as early as 40,000 km, was even done. Not strictly necessary, but it gives the buyer a lot of confidence. The buyer paid a fair price compared to the market, but bought a car with a clear, worry-free history.
We also auctioned a Porsche 930 Turbo. At first glance, it looked like a great car, but it had a significant gap in its history. There was, however, a lot of recent maintenance and overhaul work. It sold for a reasonable price by today’s standards. For the seller it was a fair value, and for the buyer, it’s a lovely car to restore with some love and care.
Smart Classic Car Buying: Inspect, Budget, Enjoy
In short, "cheap" doesn’t have to become expensive, as long as the buyer understands that attention may be needed to bring the car to top condition. On the other hand, you might simply accept the car as it is, enjoy driving it, and take future repairs in stride. This brings us to another point: some cars are almost too good to drive, end up in storage, and only come out for the occasional MOT check, all in the name of value going up or down.
In general, classics that meet certain criteria (e.g., good brand, sporting success, limited production, and ideally low mileage and few owners) tend to increase in value over time. But there are downward trends too. Over the long term it (almost) always works out, but if you’ve just invested a significant sum and later need to sell, because you have something else in mind or you need the cash for renovations or an unexpected expense, you might be unlucky if the market is in a slump.
So buy a “toy” wisely. Not a bottomless pit (“it was so cheap”), not with borrowed money or your last euro, but because you truly like the car, find it special, or love the way it drives. Financial returns are nice, but never guaranteed. Insurance, storage, maintenance, and tax are recurring costs, unless you have the space and stop driving, of course.
Buying at auction is exciting, but remember: use your judgment and, when in doubt, go see the car before bidding, especially if the description is brief. Sometimes it disappoints (everyone has their own standards), but often it’s better than expected because the documented details help set the right expectations.