How online car auctions are changing legacy auction business model | Autocar

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Online car auctions have been a lucrative way to sell cars during the pandemic, and their success has meant the business model of the traditional auction house is changing

Sites such as Collecting Cars, Bring a Trailer and others try to install an auction-house level of dignity to the process. Sellers are encouraged to be detailed with the description and upload multitudes of photos. A photography service is offered. Shady practices employed on some sites, such as shill bidding or ‘sniping’ , are banned, the latter by extending the auction’s end by two minutes if a last-minute bid is put forward.

Auction companies are realising that their business model is under threat from this much improved online buying process. Last year, Bonhams bought online car auction site The Market, which operates in much the same way except that the seller pays, not the buyer. And no matter how you spin it, the most eye-popping prices are still being generated at these events. Take the Aston Martin DB4 GT Zagato that sold for $9.52m at RM Sotheby’s auction at Monterey, California, in August last year, or the 1962 Ferrari 268 SP at the same event, which sold for $7,705,000 .

The long descriptions and dozens of photos will remain but there will be a straight price. So what’s the difference?

 

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