Hammer blow over steep auction prices

By Jack Carfrae

21st February 2009

WITH car prices in the doldrums at the moment, you’d think there would never be a better time to head down to your local auction house and bag a bargain.

That’s what Auto Express reader Robin Hopes had in mind when he visited the BMW sale at his local British Car Auctions (BCA) site last month – but he was in for a shock.

Robin, from Bedford, had scanned the classified ads and price guides to get an idea of the value of the car he was after. With a budget of £20,000, he expected to drive away in a second-hand BMW 6-Series.

“I was shocked when all five of the models I was interested in were sold for more than the recommended price – and that was before the auctioneer’s fee had been included!” Robin told us. “I expected to find a bargain at auction, but I could have gone to a dealer and got a near-identical car for less money.”

We found a 2006 BMW 630i convertible, with 15,000 miles on the clock, in the classifieds. It was on offer for £22,990 at a dealership in Harrogate, North Yorkshire. Robin told us that an identical 630i convertible made £26,700 at BCA’s auction – not counting the auctioneer’s fee.

We quizzed the firm, and a spokesman said: “The market was more bullish in January – so values crept up.” However, an official from rival Manheim explained: “Dealer group sales often have higher conversion rates and values than with conventional sales. Or it could be that traders at the sale were buying models to order, for a customer with a set budget.”

Auto Express also spoke to Jeff Paterson, from trade bible Glass’s Guide. He told us: “The used car market is healthier than it was last year, so values are strengthening. But auction has traditionally been the cheapest way to buy.

“Perhaps that particular car had a very high spec, or it was bought by a dealer when values were at their lowest, and he had simply waited until the market strengthened and sold it on for a bigger profit at auction. “However, if you can find a cheaper car at a dealer, there’s no reason not to go for it.”