It's the automotive equivalent to the circus coming to town. Every January, sellers, buyers, and window shoppers descend upon Scottsdale, Arizona, for the Barrett-Jackson collector car auction. Why? It's the biggest event of its type around. This year, 1,163 vehicles went before the gavel and over 280,000 visitors were there to see it happen. It's a car show with a catch: You can have any car for your very own, provided you have a bidder's card, and enough cash.
The Air Ride Mustang started life as an '05 SEMA project before being worked over and stic
The real drama of the event is on the seller's side, because Scottsdale is a "no reserve" auction. The sellers are really rolling the dice, since there's no minimum that a car can sell for. Your $50,000 ride could bring $80,000, or it could theoretically net you a dollar. The good news for sellers was that Barrett-Jackson was thick with genuine buyers, over 8,000 of them. And these weren't just wishers and dreamers; each one had to pay $500 for the chance to bid. Whether a car brings in the long green simply depends on if the car catches a buyer's attention. Actually, a ride needs to be wanted by at least two bidders for the price to ratchet up.
We decided to follow a car through the process and see what's really involved in selling a car this way. When we found out Air Ride Technologies was selling their Forza Motorsports '05 Mustang, we contacted them. We knew they wouldn't mind us peering over their shoulders for a few days. Bret Voelkel of Air Ride Technologies told PHR: "The Barrett-Jackson auction is a huge, unique marriage of money, cars, and fun. The adrenaline runs high because it is a no-reserve auction, and whatever the car brings, it brings. It's the ultimate affirmation of the level of car that you have brought. It's definitely not for the faint of heart or the easily offended!" This '05 'Stang they decided to sell was originally built as a SEMA project for the Ford Motor Company, and was used to develop Air Ride Technologies' kits. Later, it was used to compete, and win, the Forza Motorsports Showdown that aired on the Speed Channel in the spring of '07. So this wasn't your garden variety Mustang GT, it had some celebrity to it, but what would that translate into come auction time?
The first fee for a Barrett-Jackson seller is the one to be included in the event. In the
The Forza Mustang was cool enough to secure a display slot in the big tent with all the he
Also on hand to help promote the car to potential bidders was the team from the show. Brit
Twenty-five-year-old Angela Cope was the driver who piloted the Air Ride Mustang to victor
Each car at the auction was given a lot number with Number One being the first car for sal
The trip from the display spot to the auction block can take several hours, which is a goo
The covered staging area before the auction block is the last chance for the sellers to pi
The moment of truth was when the Mustang hit the stage. Sellers were given the choice of p
As the auctioneer introduced the Mustang and gave a brief history of the car, potential bi
We asked Bret Voelkel, owner of Air Ride Technologies, what he was hoping to get for the M
Once the sold sticker is slapped on, it's moved outside to a tent where paperwork is final
Transport-The Hidden Cost
One cost that's often overlooked by both sellers and buyers is transportation to and from the event. Air Ride Technologies had a booth at the show, so it was easy to get the Mustang to Scottsdale. But for the average guy, this can run from a few hundred bucks to a few grand. Buyers also need to arrange to have their new purchase insured. Barrett-Jackson has thought of all these details and has insurance companies like Hagerty, and transport companies like Intercity Lines, on hand to help buyers with the entire car-buying minutia.
One big difference for the buyers is the aspect of sales tax. Yep, local and state officials are on hand to make sure they get their cut. If a buyer isn't having his car professionally moved out of state, complete with a bill of lading, he will have to pay sales tax. This means a buyer can't bring his trailer and say the car is going out of state.
The Costs of Doing Business
Barrett-Jackson is a business, and it makes its money off fees and commissions. Nonetheless, it's not all profit. Barrett-Jackson spends quite a bit putting on the week-long event, and promoting the cars up for sale. Still, when you do the math, it's definitely a business we all wish we had thought of first. Here's a sampling of the costs involved.
Buyer's premium: 10 percent
Internet/phone buyer's premium: 12 percent
Absentee bidder fee: $100
Seller's commission: 8 percent
Bidder's card: $500
Seller's entry fee: $600 to $1,500, depending on lot number
General admission into show: from $15 on Monday, to $55 on Saturday. A week-long pass runs $160
The Deal of the Auction
Barrett-Jackson has a somewhat unfair reputation as a place where buyers typically overpay for cars. While this does happen, it's more of an exception rather than the rule. Many times, buyers can scoop up cars at a fraction of their build cost. Case in point is the Hemi powered Dart, lot number 1017, picked up by Yancy Johns, of Pigeon Forge, Tennessee. PHR featured this Dodge back in January of '06, and at that time the builder had roughly $250,000 into this highly modified Dart. Since then, he had refurbished the fuel-injected Hemi, and added a very nice high-end interior. A battery issue prevented the car from starting, and had to be pushed over to the auction block. We don't know if that scared away the bidders, or if other factors came into play, but Yancy ended up winning the Dart for the meager sum of $51,000. That's about 18 cents on the dollar, and less than what was in the drivetrain alone. "I didn't really expect to win when I put in my bid since it was so low," says Yancy. "Next thing I know, I was told that the car was mine, and I was figuring out how I was going to explain this to my wife." Turns out that Yancy didn't have to worry about telling his wife, since the action was broadcast on TV, resulting in a phone call from the missus. We've since heard that Yancy is out of the doghouse, and enjoying his new Mopar.