By Eric Hill, Rose Law Group Automotive Investment Attorney | Rose Law Group Reporter
Car Week is in full swing and enthusiasts from around the world have descended on Arizona to bid on vehicles at auction all week long. This year promises to be the biggest ever, with Barrett-Jackson anticipating the largest-ever auction in its 50-year history. So, how should enthusiasts prepare to bid in such a hot market? Here are some tips for buying a car at auction this week:
1. Learn as much as you can about the car you are interested in on a high level. Start with the make and model that interests you and then narrow your attention to a range of model years that best reflect the features you want. Most people know how they’d like their dream car to be equipped – i.e., a specific engine, color, transmission, body style etc. The combination of features offered will vary by model year, so decide which features you want and learn the model years in which those features were available. There are a lot of great resources and buyer’s guides available online to help you learn about the production details of a particular make and model of car.
As you do this research, remember that cars equipped with desirable options command higher prices, so think about which features are most important to you and whether you’re willing to pay a premium for them. Once you know the precise make, model, and year of vehicle you’re looking for, find out if there are any mechanical problems that are common for your chosen vehicle – that knowledge should inform your inspection of the cars you encounter at the auction. Finally, look at pricing information. Sales figures from previous auctions, private sale listings, and online pricing guides will give you an idea of what a particular car might be worth.
2. Learn as much as you can about the specific cars you’re interested in at the auction. If you’ve done the homework above, you’ll know what to look for before you arrive. Once you’ve identified the examples you like, inspect them well before they go across the auction block. Plan on going early so you have an opportunity to inspect the cars and talk to the sellers. Think of questions for the seller in advance – have they encountered any of the common problems that you learned about in your research? If so, did they fix the problem? Did the seller work on the car or did a shop do the work? Is there documentation available that supports the seller’s claims? These are just a few examples of questions that you might ask a seller but remember you don’t have to take their word for it. Your own inspection is critical, so if you aren’t comfortable inspecting the car yourself bring someone along who is familiar with the type of car in question and can help you spot any potential problems.
3. Stick to your budget. Once you’ve picked the cars you want to bid on, decide how much you’re willing to bid once the auction begins. You should already have a general idea of what the car’s value might be based on your research, so keep that in mind as you weigh your interest in a particular car against how much you’re willing to spend. Once you’ve settled on a number, you’re ready to bid. Remember that number once bidding begins and don’t get into a bidding war if you want to avoid overpaying.
4. Have a plan for after you win. If you’ve followed the steps above – with a little luck! – there’s a good chance you’ll win the auction and get to take your dream car home. As such, you need to be prepared to take delivery of the car if you win. That may mean having the car shipped from the auction or trailering it home – auction companies like Barrett-Jackson can advise you on vehicle transportation if needed. Once you have the car home, you’ll need to get it registered and it may need an emissions test, both of which can be challenging when dealing with rare or vintage vehicles. You may also need to insure your collector car with a policy that differs from standard auto insurance products. As always, if you encounter any difficulties as you navigate this process, contact an attorney that specializes in collector car issues.
