Insight Sept 2020: Online Auction Platforms

by | Sep 30, 2020 | UK Car Valuations

Stuck at home during lockdown with money to spend and no physical auctions taking place, buyers have warmed to online auction platforms and one winner from this has been the Collecting Cars website.

Launched just over a year ago by a couple of petrolheads, recently broke through £20 million in total sales. Not bad for a purely online sales platform with fewer than 50k subscribers on Instagram, but much of that success has arrived since the onset of lockdown. The platform is gaining traction fast and its fee-free model is shifting the online auction space.

A good example of the robust market and the Collecting Cars effect can be seen in an E36 M3 Coupe, registration number M246 WEO, which was offered for sale via the online Classic Car Auctions website in August 2019. Finished in Avus Blue, the 1994 3.0-litre was described rather plainly: “This car is all standard and has much service history. It also comes with the sports seats. The current vendor has given it a thorough overhaul, spending £4,000 on it. The E36 chassis M3 was touted as one of the best handling cars of the 1990s and is now considered something of a modern classic.”

The Classic Car Auction details showed the odometer reading as 118,000 miles, making the estimate of £18-23,000 rather confusing. This would be well over the top for a 3-litre Coupe with £4k recently spent and (presumably) plenty more needed. Unsurprisingly, the car failed to sell and disappeared from the market until popping up again during lockdown.

Offered to the market at the end of May/early June, the online ad text carried the same photos, but with more detail this time around. The car had three previous owners with the most recent owner covering just 300 miles in his four-year tenure of the 3-litre Coupe. The total mileage was less than 40,000 as supported by the online MOT history.

The history also supported the mileage, with five main dealer and two independent stamps. The Light Grey leather interior looked immaculate. With a bit more effort put into presentation (not a great deal more, it has to be said) the car sailed past the previous top estimate, to finish at £23,500: a great result for a standard 3-litre M3 Coupe in an entirely online auction and an interesting result for those of us with similar cars in the garage.

The strong finish highlighted another difference between the two platforms: costs and commissions. Classic Car Auctions charges £250 plus VAT for a “Premium Ad” with 4% plus VAT of the final price as a seller’s commission. Had this car achieved £22,000 from a Premium Listing on Classic Car Auctions, the fees would have totalled £1,356, giving a net return to the owner of £20,644.

On, there is no charge to list and sellers receive the full final bid amount with no commissions. So a £22,000 sale gives a net return of £22,000. This is quite a different proposition for sellers.

Collecting Cars has been likened to an Anglicised version of the Bring A Trailer website but there are several differences. Bring A Trailer grew organically from a blog highlighting classified ads for interesting unfinished projects and old race cars that were not road legal (hence Bring A Trailer), into a classified platform in its own right and later into its current guise as an online auction platform. Its growth and development is supported by a large user community: some 400,000 registered users and 150,000 registered bidders, according to recent estimates. The users pass comment on the auction lots – some positive, some negative – and the site claims this “vetting process” helps with auction transparency.

As with most other online auction platforms, Collecting Cars has no such community, instead relying on enthusiasts and social media sharing to amplify its sales. An apparently select and savvy curation process means that the list of sold items is a good place to be. Unlike other classic car auctions, including eBay, the only obviously poor condition projects are proper old classics: V12 Lamborghinis and Jensens with rock star history. It’s a browser’s paradise and the CC model seems good news for sellers, but whether buyers come away with their dreams intact is a story for another day. Sufficient BMWs – including M-models, Alpinas and more – have now sold on the platform to make an “I bought a Collecting Cars BMW” feature seem doable. I’m not in the market for another BMW, but you never know what’s going to pop up next.