Reminder: Auction Prices Don’t Indicate What Cars Are Actually Worth
An auction isn't really a sale, the market for sports cars is arbitrary, but at the end of the day, there are still some cheap vehicles out there.
If you want to make yourself upset or depressed as quickly as possible, check out this website called Twitter.com. Whatever niche rage-trigger you’re looking for is on there, I promise. As some of my fellow forever-online car nerds already know, a favorite automotive-specific source of such frustration is Bring a Trailer (BaT)’s feed. It’s not BaT’s fault, I guess, it’s just trying to build its brand like the rest of us on there. The people buying cars on its platform, however, are making moves that sure do seem strange to those of us without Scrooge McDuck-style coin pools at home. Still, I think I have some solace to offer if you’re afraid of car culture being completely colonized by the ultra-wealthy.
I was inspired to write this blog by a string of tweets, but really, I’m here to atone for an old sin and deliver a message: Online auction sale prices of pristine-condition cars are not a good barometer of the whole used car market.
It’s really easy to think of an auction as the ultimate arbiter of a vehicle’s value. After all, it seems like the purest expression of letting the market decide what something is worth. I used to fall into this trap myself; that’s the old sin I’m repenting for right now. At my last job, I would look at an auction result for an interesting car and cite it to declare, “here look, X car is worth Y.” That type of thinking was foolish. All that an auction sale price proves is what one specific car was worth at one particular moment in time under uniquely high-pressure circumstances.
Auctions are not simply sales, either. They harness ego and adrenaline, two powerful factors that can make sane people do crazy things. You don’t “buy at auction,” you “win at auction.” And winning feels good. It’s very easy to get swept up in the hype of the moment when you’re bidding on something. Not only do you want to be victorious from this artificial conflict you’ve entered, but you’re being validated in your decision to keep spending by spectators and every other bidder who might be the mix.
If you’ve ever gone beyond social media to directly look at one of these online auctions, you’ll notice that the comment section is almost always full of encouragement to up the price and things like “well bought” or “these are coming up!” get posted no matter how high the final price is. That’s because the auction world is insulated from reality — it’s just a nest of cashed-up people throwing money at each other. It’s always been that way (Barrett-Jackson, Sotheby’s, et al.), but now it’s in our face thanks to Twitter.
Why do you think a bunch of new online car auction sites have popped up in the past couple of years? The whole point of an auction is to create an environment that stokes the free market’s fire. And it’s just like Vegas — the odds are tilted heavily in favor of the house.
So although it’s tempting to see a 1995 Camaro sold for $100,000 on BaT and immediately conclude, “woah, those are bringing big money now,” it would be more accurate to interpret that as, “that one Camaro, in that one moment, brought big money that one time.”
Here are some examples of what I’m talking about:
Matt Farah’s a smart dude and he knows cars. I don’t really get down with the “$X driving experience” concept, because the cars I like are mostly slow and junky. But objectively speaking, he’s got an airtight case here. If you’re trying to calculate how to get the most automotive technology and capability from $28,000, it would make far more sense to buy a brand-new Toyota GR 86 than a 26-year-old BMW that wasn’t even considered all that great of a performer when it was fresh off a dealer’s lot.
Victoria Scott’s point should be well-taken there because that E30 variant, the 325e (“efficiency”) model, has historically been considered the least-desirable version of the late-’80s 3 Series range. On paper, that’s a bad deal — even in today’s wacky used car market, it would make so much more sense to find a random old E30 (yeah, there are still some out there) in crappy shape and fix it up for less than $21,900 (plus auction fees). What I’m trying to say is: Just because someone with presumably a lot of money to burn thought this particular ultra-mint 325e was worth a fortune does not mean this is the new standard we should be holding 325es to.
A few more similarly preposterous-looking recent transactions, now that I’ve got Twitter open:
The Cayenne Turbo S is rare, yes, and the ones in the above-linked tweets were exceptionally low-mileage and well presented. But even that almighty top-tier model is still findable and other non-S Cayenne Turbos are downright plentiful.
As for the BMW E46 M3, it’s no secret that they’ve been soaring in value but that $44,000 figure is an exception, not a new standard. Normal examples, with normal-use mileage but still in serviceable shape, are still selling for far more reasonable prices. There were 100 convertibles on AutoTrader alone when I checked.
The reason we’re seeing these crazy numbers on BaT’s feed is twofold:
- The site is very good about selecting ridiculously mint, uniquely perfect examples of almost every car it lists.
- An auction environment, especially a brand-name auction (which BaT most certainly is now), is an exceptionally high-intensity, high-dollar scene that’s largely removed from reality by design.
Buying, or rather winning, a car at a brand-name auction has cache and we’re watching the effect of that play out in these prices.
You’re probably as tired of reading “used car prices are too damn high” as I am of writing it, but unfortunately, for a long list of reasons, it is still true. Despite some outlets looking for optimistic interpretations of this month’s Consumer Price Index Summary, I think it’s going to be a seller’s car market for quite some time. And when it comes to vehicles that are generally considered cool, I’m sorry if you’re shopping, because today’s it-cars (E30 BMW, MKIV Toyota Supra, classic Ford Bronco, any Porsche, et al.) will never return to the prices we got used to when these vehicles were undiscovered. But the auction prices for ultra-mint examples of any given car should not be defining what the average used version is worth.
And there is still cheap hardware out there.
A cursory glance at my local Los Angeles Craigslist still turns up a few interesting prospects under $1,500 on the first page every time I check. Right now I can see a ’99 Pathfinder “very good conditions everything works clean title runs good” for $1,500 obo, an ’88 Chevy truck “runs great” for $1,000, a ’79 Buick Regal two-door “engine start but need to go thru it been sitting for some time” you could probably get for $500, an old Accord, a Mercedes E300…
Before you say “yeah but all those cars suck,” yo, that’s the same type of junk that lived in the low four-figure price point when I was coming up in cars in 2004. Here are some of the cars my friend group of gearheads drove, wrenched on, and cherished in high school: an EF Civic LX, a first-gen Acura Legend (manual), an ’81 Camaro that routinely caught fire, an automatic front-drive SOHC Dodge Stealth, a Lincoln Mark VI, a salvage-title non-VTEC Integra… Hell, some of the best automotive experiences I’ve had to this day include hitting jumps in a buddy’s spraypainted first-gen Ford Taurus wagon.
It does suck that the wheels of capitalism seem to be rolling towards an increasingly deep chasm between haves and have-nots, and many criticisms of the gentrifying car scene are valid. But you don’t need to have grown up with an E30 M3, or even a 325is, to enjoy cars in your life. And you definitely don’t need to take any given auction sale prices as some kind of arbiter over our collective automotive future.