I have never actually bought or sold a classic motorcycle at a classic motorcycle auction. There are numerous, well known auction houses in the UK and abroad that sell art, classic cars and classic motorcycles. In the heady days before the 2008 crash, it seemed that they could sell anything at ever-increasing prices. It seemed that everyone was tripping over themselves to throw ever increasing bundles of cash at them to buy anything with the word classic in the catalogue description.
However, since the crash, they seemed to have changed their strategy, and it’s not just me who has had this experience. Many of my clients have made exactly the same complaint and asked me to market their machines. Auction houses charge to put your machine in the catalogue, they often charge admission to the sale and they typically charge sellers 15% and the buyer 20% all plus VAT. At those rates, they are really quite indifferent to what they achieve as a final sale price.
I had two beautiful classic Hondas, which one such auction house decided to market. They came, they saw the machines, they agreed to the stunning condition and how original both machines were. After much debate we settled on a reserve price of £9,000 for one Honda + their sellers fee and £8500 for the other + their sellers fee. Luckily, I was late entering the machines and they had not cashed my cheque for several hundred pounds to put my machines in their catalogue. Jus a week before the sale the auction house phoned me and said that I had to lower my reserve price to £4,000 and £5,000 for the bikes or remove them from sale.
I asked them why I would want them in the sale, to pay them 15% + Vat, their catalogue fees with such low reserves, when I could put them on Ebay without a reserve and achieve at least £8,000 and £5,000 at cost of about £17 per machine. They told me that the bikes would sell and they would have lots of eager investors bidding away and the bikes would probably achieve £11,000 and £13,000.However with such high reserves, they did not think that anyone would even bid. I laughed, removed the machines from sale and sold one by making one phone call the following week for £10,000.
I went to the sale in question and was shocked at how chaotic it was. You could not get close to the machines to look at them. There was no seating and the viewing area was not raked, so you could look down over the people in front of you. They did get strong values on some of the British marques, others sold, but for low prices and the emerging market machines went far too cheaply, because there were only about three bidders interested. I’m so pleased I didn’t put my bikes in there, I would have lost a fortune. I also spotted a Laverda they were marketing as a Montjuic, but it was the less valuable 500 Sport. I spoke to a lot of the bidders and collectors there who all said it was the last time they were buying at such auctions, because they didn’t like the set up.
A client of mine has a BMW R32, which he has painstakingly restored over many years. There are believed to be three of these machines left in the world. It is a 1923 machine, the first year of motorcycle production from BMW. I have been told that the last one to sell went in 2004 for US$170,000. The market has gone up since then. The reserve price was agreed between my client and the auction house, although it was considerably less than the value of the one that sold in 2004. A few days before the auction, my client was called by the auction house telling him that he had to reduce the reserve by nearly 40%, or remove the bike from sale. Needless to say, the client removed the motorcycle from sale and has now placed it with me for sale.
So, whether you have a classic motorcycle, or classic motorcycle collection, you want to sell for its true value. Or if you are wanting to make a great tax free investment in buying and taking possession of an emerging market classic motorcycle. Then call Paul Jayson, The Classic Motorcycle Broker on 01803 865166 or go to www.themotorcyclebroker.co.uk and avoid the nasty pitfalls and whimsical valuations that seem to fluctuate and reduce as the sale date gets closer.
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[…] been disparaging of auction houses in earlier articles, such as this one, I find myself happily eating my words. Previous experiences of paying to place my motorcycle in […]