Buying a car on the Monterey peninsula is simple – if you have the necessary money. Actually it’s more important that your bank says you have the money. You will need to do some homework though, since every auction house is different. Some are very stuffy and very strict. Others believe that since you haven’t committed a major financial felony in the past decade, you can be trusted.
Be Informed and Be Focused
There are so many auctions on the Monterey peninsula over the week that you cannot possibly attend all of them. It helps that each auction house is more or less specialized.
Over the past decade the auction houses that cater to Monterey audiences have taken different paths. Some are designed around the hobbyist. Their cars tend to be affordable and there are lots of them. Another group of auction houses are designed for the serious collector. They have a limited number of cars at very high prices.
You probably should start preparing online. The printed catalogues can run as high as $200 (though some do come with general seating admission). You might well spend $1,000 and still not have the catalogues from every auction. Or the ones most important to you. Narrow your search.
This is the point where you have to make a decision about which cars you’re going after. The estimates in the catalogue are just that. We used to call them SWAG – Sophisticated Wise Ass Guess. Some cars may appear to be a good value but that doesn’t mean they’re going to be cheap. Hanging out on the floor and hoping to steal a bargain probably won’t happen in Monterey.
There’s a lot of paperwork involved and it’s best done weeks before the auction. All of the auction firms allow you to register online. Be very careful of the registration fees. Rick Cole Auctions does not charge for registration, while Gooding and Company charges $200. Mecum Auctions will require $100 but you can buy a registration package for multiple auctions for $500.
The auction house wants to know if you actually can pay for the car you’re bidding on. The person selling the car assumes that the people bidding have been properly vetted and they’ll get their money. You, as a buyer, have to prove to everyone that you actually have the money.
Some of the auction houses require a Bank Letter of Guarantee before the bidding starts. This letter will state that your bank will irrevocably honor and guarantee payment and that no stop payment orders will be issued on this account. Here’s a sample of what RM Sotheby’s requires.
If you don’t want to tie up several million dollars for a week, some houses will allow you to use a Visa card immediately after the bidding stops. You then wire the total purchase price to the auction house on the next business day. Rick Cole Auctions do not require a letter of guarantee nor will they put a hold on your credit car balance.
Most auction houses will not accept credit cards for the entire purchase of a car. Major credit cards have something called Purchase Assurance or Extended Warranty Protection. This gives you a 90-day window to return a defective item and not be charged for the item. American Express states the “if you try to return an eligible item within 90 days from the date of purchase American Express may provide a refund.”
Those are words that no auction house wants to hear.
Payment and Fees
You’re well aware of the number when the hammer dropped.
You will not be paying that amount. You’re going to be paying more. Sometimes it’s a lot more. You will pay not only for the car but you also will also pay a buyer’s fee, taxes, and a DMV (Department of Motor Vehicles) fee.
California residents are required to pay sales tax on their purchase. If you’re a licensed dealer you’ll be exempt from the sales tax, but you must provide a copy of your license to the auction house. If you’re not a California resident you must ship your car out of California with a licensed common carrier. If you drive your newly-purchased car out of the state you will be required to pay sales tax on your purchase.
This is a percentage based on the final bid price. There’s really no room for negotiation of this one. While a 10% rate is considered normal, Mecum Auctions only charge 8%. Some houses charge a 15% commission on motorcycles. Automobilia premium charges can run as high as 25%. Make sure you know the premium charge before you raise your hand.
You have to make arrangements beforehand to do this. A representative of the house will usually call you about five lots prior to the car you’re interested in – perhaps 15 to 30 minutes in advance. You can follow the bidding and then instruct your representative as to what you want to do. Make sure you check on this a month or so ahead of time.
You can save a lot on airfare and hotel bills by staying home. The downside is that you may never actually see the car. It’s sort of like buying a car on eBay. Every auction house provides for online bidding, but they seem to restrict it on specific items. Rick Cole may be the first to offer smart phone bidding. With him and others, you can bid from anyplace in the world.
It’s best to call the common carriers before the auction and get an estimate prior to the auction. Explain that you’re going to be bidding on a car and you may need their services. Ask what you might do to expedite the process. Also check on any limit they might have on cargo insurance. You may want to purchase extra insurance.
Be prudent. Set bidding upper limits, remember them, and avoid alcohol. At least do that until you’ve signed all the necessary paperwork when the celebration can begin.
The Companies and Dates
Gooding and Company – August 15 & 16, 2015
Pebble Beach Equestrian Center, Stevenson Drive and Portola Road, Pebble Beach, CA
Bonhams – August 13 & 14, 2015
Quail Lodge, 7000 Valley Greens Drive, Carmel, CA
Mecum Auctions – August 13-15, 2015
Hyatt Regency Monterey, 1 Old Golf Course Road, Monterey, CA 93940-4908
Rick Cole Auction – August 13-15, 2015
Monterey Marriott, 350 Calle Principal, Monterey, CA 93940
Russo and Steele – August 13-15, 2015
Old Fisherman’s Warf, Monterey CA
RM Sotheby’s – August 14 & 15, 2015
Portola Hotel & Spa, 2 Portola Plaza, Monterey, CA