Due Diligence at a Live Automobile Auction

When attending an auction, you must remember this, an auction is literally a big poker table and YOUR poker face can pay you huge dividends or cost you the object of your desire. Yes, auctions can be lucrative but they are also risky business. Buyer beware is taken to a new level because auctions sell merchandise "as is". The auction house is essentially lending simply a venue to have the seller (the consignor) and the buyer connect. Yet, as a buyer there is very little information about performing your due diligence. eBay and PayPal have advanced the game but yet the industry for live auctions is growing and the information on how to perform your due diligence on items is sorely lacking. Perhaps one of the largest purchases in our family is the automobile and one of the most lucrative and risky of all items offered is the automobile. Learn step by step how to perform your due diligence checks for a live automobile auction from an industry professional. Learn the rules first hand from both a person who works in the auction industry and has direct experience and who has bid and won at a live automobile auction. Learn the tips from an avid car collector firsthand and much more.

Classic Car Auction

beautiful photo of brunette girl in a one piece red swimsuit in front of classic car with the words above her stating "let us show you more..."
beautiful photo of brunette girl in a one piece red swimsuit in front of classic car with the words above her stating "let us show you more..." | Source

The Value of the Poker Face - First Hand Account From Two Psychiatrists

Long ago a psychiatrist friend/neighbor of mine (both had their PhDs from Northwestern University in psychiatry) confided when they were shopping for their home, they did not want the Realtor to see how badly they wanted the home. Long story short, they got the storybook home of their dreams for what they considered a great price. The moral of the story was that their poker face and not revealing their true emotion of how badly they wanted that particular home paid major dividends. They not only got the home but was able to obtain it at an excellent price tag - well below what they were willing to pay for the homestead.

Why are we talking about this home purchase? Because we need to remember this story holds true also at the automobile auction. Do ask questions, do your homework, do hear the engine run, do examine the documentation, do examine the door jams closely but above all of this, don't blow your cover - don't show your emotions.

This is the first rule of due diligence, do not under any circumstance share your special interest in the item up for sale. Ask the questions without any storytelling, do not offer any emotion. Always keep in mind, this is a purchase and the price does matter. Don't share your backstory, don't share the number of years you have hunting for the object of your desire, don't share what this might mean to you and your family or how well it might work in the framework of your collection.

#1 Rule of the Hunt

Number one rule for attending an auction is to stay in the background and realize you are hunting. All hunters wear camouflage, a great buyer at an auction, hunts for its prey and NEVER boldly announces their overwhelming desire for one particular item.

This "rule of the hunt" and many other tips will help you be a better bidder and a smarter buyer at an automobile auction.

Value of Used Vehicles

  • Condition
  • Mileage
  • Options

Car Values

Cars are valued by their condition, their options and their mileage. Some cars demand special maintenance and knowing the mileage for example for a Ferrari is critical.

Some cars are literally loaded with a sports package or other upgrades.

Some cars are pricier because of the designer.

Learn the history of the car you desire, know the options, know the designer if applicable, know the short falls and the complaints about the car.

These items are perhaps obvious to you. The one item we haven't mentioned which can make all of these items incidental is yet to come. What did we leave out in this list? Read on...

Due Diligence Chart of Action Items

due diligence chart of action items in grey special shapes
due diligence chart of action items in grey special shapes | Source

Value of Vehicle - Others Items to Consider

  • awards
  • pedigree
  • originality
  • documentation
  • street worthy
  • automobile inspection
  • matching numbers

Other Items to Consider When Shopping for an Used Car

In the world of classic cars, the items we mentioned can add or subtract value but what many people forget is the car's pedigree. For example, a race car that has won races is much more valuable if the winning races are fully documented.

Which leads me to the pivotal piece in the puzzle of classic car collecting - documentation.

Always, always ask to see the documentation. Do call ahead of the auction and ask to speak with a car inquiry person at the auction house. Do ask about the documentation and try IF you can get a photo sent you of the "promised" documentation.

Remember a photo goes a long way in helping you make a decision and in ensuring what you are buying is what you believe you are buying.

Matching Numbers Matter Most!

matching numbers and vehicle model production for classic cars
matching numbers and vehicle model production for classic cars | Source

Number Matching Definition

Definition

"The term "number matching" (or "matching numbers") is a term used in the collector car industry to describe the authenticity of collectible or investment quality cars. Number matching generally means that a particular car still contains its original major components or has major components that match exactly the major components the car had when it was new. These "major components" are not always agreed on.[3] The appearance of a number matching car likely could not be distinguished from an original car."

Matching Numbers and Titles

Some classic collector cars simply don't have matching numbers because the numbering system at the time was non-existent. Some cars are hand built. Whatever the case, do your homework and understand the strengths and weaknesses of what the matching numbers can or cannot tell you.

Do examine the rules of the auction company carefully. Do as about their policy and read what they mandate of the consignor.

To assist you in deciphering some of the matching number definitions, I have provided a definition for your review to the right. Do read this and ask your auction company how they mandate matching numbers.

How to Buy A Car At Auction

How to Buy & Sell Cars

12 Due Diligence Must DO Steps

Before The Auction
1. DO make a checklist
2. DO ask about the documentation

3. DO ask for more documentation
4. DO ask for the vin number
5. DO considering purchasing a vehicle history report (know the pros and cons of this thoroughly)

While On Site At the Auction
6. DO start the engine (listen to the engine running free of auction block noise)
7. DO inspect the documentation (also see item 2)
8. DO ask for more documentation than provided
9. DO bring a mirror to look at the underside of the automobile

10. DO inspect the engine

11. DO ask about documentation (yes, again for the second time)
12. DO ask about matching number


Door Jams Offer A World of Discovery

Just as a face lift can hide a person's age, a new coat of paint can camouflage lack of care. One o the easiest telltale signs of care is the door jams. Inspect the door jams closely as these have a story to tell.

What a Door Jam Can Tell You

If you are an astute student of car renovation, you know the door jam will tell you allot about the quality of the restoration.

Take time in your zeal to closely examine the door jam.

Go back to rule number one and while you are examining the door jam, do so discretely. Remember you are in competition and you don't need to share your secrets of examination with others.

Automobile Auction Block

auction block photo
auction block photo | Source

Car History Reports

Car history reports can possibly help you. There has been recently some controversy as to the accuracy so carefully consider this fact before you purchase a report.

At the right I have provided some sources for you to consider.

Many savvy car enthusiasts choose to rely upon their trusted mechanic more than a paper report. I would leave this item up for you to determine.

Due Diligence Pays Dividends at Car Auctions

So there you have it some simple tips to get you started to head off to your automobile auction. The main item is to have fun. This is a great hobby and loved by millions around the world.

Remember, as in life, the joy is in the journey. In the car world, it is not uncommon to hear the stories of the car buyer who hunted for over 25 years for the perfect classic car - the car of their dreams.

I wish you the very best my friend and that your hunting time is as enjoyable as my time has been and that your hunt is short and very bountiful.

Auction Audience

auction audience
auction audience | Source

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© 2013 American_Choices

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Comments 2 comments

torrilynn profile image

torrilynn 3 years ago

American_Choices,

I agree with you that auctions are like a poker game

it is quite a gamble on seeing whose going to outbid who

very thorough and well written article overall

thanks for the read

Voted up


American_Choices profile image

American_Choices 3 years ago from USA Author

torrilynn,

Auctions count upon ego and going in, you must keep your ego in check and set your boundaries.

Sadly too many people run to an auction without much concern for the how and why and what the potential purchase may mean to them.

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