A quick guide to online car auctions

Among the many new ways of doing things that the pandemic has ushered in, a particularly interesting development to us here at Lancaster Insurance has been the growth in online car auctions, for the trading of classic and historic vehicles.

The advantages of this format are plain to see. Car lovers can sift through hundreds of desirable classic vehicles from the comfort of their own sofa – and, if they see something they like, they can bid on it with no more effort than a click of a mouse.

So much easier, more convenient and less time-consuming than travelling the length and breadth of the country to bid on vehicles at actual, physical auctions – and, during times when we’re all wary of mixing with large groups of people in enclosed spaces, the online auction’s advantages over its physical counterpart have only become clearer. Make no mistake, online car auctions are easy, user-friendly – and here to stay.

The sophistication of most of the online auction sites adds to the appeal. If the user interface is good, the photos are professional standard, and there’s some video footage of the vehicle being auctioned, these online counterparts have relatively few drawbacks when compared to live auctions, in terms of experiencing the product before you buy.

But how does the process work? How do you recognise a reputable auction site, and how can you be sure that a car you buy online is all that it promised when you come to see it in the flesh? Read on for our guide to getting a good buyer experience from online car auctions. And don’t forget the importance of protecting anything you do acquire online with some classic motor insurance.

First: know the marketplace

There is quite an array of online auction sites out there – but obviously you only want to use the ones that are conducting their business fairly and according to the regulations, so that you will get what you have bid for.

A good way to find out whether a particular auction site is honest and reputable is to search for mentions of that site, either on the internet generally or – if it has one – on the auction site’s own chat forum or social media channels. There may be reviews of the site online, too. See what other users are saying about the site, and whether they have had a good experience.

So, who are the major players in the UK’s online auction world? We’ve picked out four big online auction sites for you to explore.

Car & Classic bills itself as the world’s largest, busiest and most trusted classic car marketplace, with hundreds of classified adverts for classic and convertible cars. It’s also recently added its own online auction site. Set up in 2020, the Car & Classic auction site promises 0% buyer fees plus complete buyer security, with the agreed sale total held securely in escrow (a secure third-party account) until both buyer and seller confirm completion of the sale.

Elsewhere, The Market has been doing business since 2017 and had a very good 2020, managing an 88% success rate across its £10.7 million worth of classic and collectible sales throughout that year. Now owned by renowned auction house Bonhams, The Market’s physical base is in Oxfordshire, in a 13,000 square foot building that allows its sellers, if they choose the optional concierge service, to store their cars there during the sales process. This is good news for you, the buyer, as it means that any car you purchase under this scheme has zero chance of any further damage or depreciation from the moment it goes on sale until the moment you take delivery.

The third member of our quartet, Trade Classics are certainly thorough with their documentation: they pledge to provide buyers with hundreds of photos and one hour of video of each of the cars they are auctioning. You can also sign up for a weekly email, getting notifications of new arrivals on the site every Thursday.

Finally, Collecting Cars has a broader geographical remit: launched in 2019, it gathers consignments from across the UK, Europe, Australia and the US, meaning that you have an immensely wide net of cars to draw from. Recent sales have included a VW Beetle 1303 LS Cabriolet once owned by Roger Daltrey of The Who: latterly garaged in Malaysia, it was bought by a British bidder whose wife was a big Who fan. Another happy sales story occurred when the company handled the sale of an original UK Lotus Elan S4 FHC, and tracked down one of the car’s early owners (now based in the US), who had been searching for it for years and couldn’t resist owning it again.

Elsewhere, large physical auctioneers such as H&H are now holding an increasing number of online auctions.

Next: try before you buy

It’s a good idea to attend an online auction before you start bidding. This will help you get to know how the process works, how thick and fast bids come in, how often the starting price is achieved and so on.

Also, just have a browse at what’s out there, and what prices classics tend to go for. Whether you’ve got a specific car model in mind or you’re simply browsing, it’s very important to have a rough notion of how much money different classic cars fetch at auction. How much does a 1980 Mercedes 300SL convertible typically go for? What about a first-generation Lotus Esprit that has been lovingly maintained?

All the auction sites we’ve mentioned publish their recently completed auctions as well as their live ones, so you can see what prices different models typically go for – here is the Car & Classic Auction Results page as an example.

Once you’ve got an idea of the car(s) you’re looking for and what you can expect to pay, you can spend your time happily browsing the various sites. Remember you can filter results by marque, so you can narrow your search to just ‘Audi’ if that’s what you’re after. You may also be able to opt in to email alerts whenever certain marques and/or models come up for sale.

As you get familiar with browsing, you’ll quickly learn what to look out for, as you would do when buying a classic car through other channels. We wrote a blog detailing what to be aware of when buying a classic, and the same pieces of advice will hold true when buying at an online auction – except possibly taking the car for a test drive!

Actually, that test drive may be possible after all. Although, unlike their physical counterparts, online cars cannot typically be viewed before sale, the auction company will be able to connect you with the seller so that you can view the car in person – or at least email them to ask for a few more photos of that rust under the wheel arch that’s bothering you. On each listing on The Market, for example, you’ll see a green ‘Contact Seller’ button where you can get in touch with the seller directly.

We’d definitely recommend asking the seller about the car’s history and condition, and any work that may be needed. Bear in mind, too, that the site’s vehicle report doesn’t equate to a full mechanical inspection – so, if you have any worries, get it professionally inspected.

Finally, make sure you have some insurance for your classic car when you do finally take ownership to protect your new purchase from accidents, theft and more.

Ready to bid?

Once you’ve found the classic car of your heart’s desire online, and you’ve familiarised yourself with the mechanics of bidding on that particular site, the time has come to begin the bidding process.

Before you start, you’ll need to register as a buyer with the site. Typically, buyers will register online, undergo a security validation, entering credit or debit card details (just to ensure that your details are genuine and that you will be able to pay in the event of a sale: no money is taken at this stage).

You’ll probably be able to place bids over the phone or, using your own personal login, via the site. To take one example, as a buyer on The Market you can just enter – at any time during an auction – the maximum amount you would like to bid. If your bid exceeds the others made so far, the auction site will make you the high bidder. They bid enough to keep you in the lead, but only in small increments up to your maximum limit. So if you bid £50,000 and the highest other bidder was £30,000, you’ll pay just over £30,000 – not £50,000. And, if another buyer outbids you, you’ll get an email alert to let you know, so you can decide if you want to bid higher or bow out.

Some sites (such as Trade Classics and Collecting Cars) will add a 5% buyers’ premium to your purchase.

So, you won the car: how to pay?

While you’re viewing the cars and then bidding for the one you want, the online auction houses will provide you with plenty of information and support. However, when it comes to actually paying the seller, that’s an arrangement the two of you make between you.

The exception here is Car & Classic, which as we noted will hold your payment in a secure account for between seven and 10 days while you and the seller make sure you’re happy with everything about the sale.

Do you have any protection if your purchase is not as advertised?

These online auction sites will take care to provide as much information as possible – whether text, photos and/or videos – about the cars they are selling. Ultimately, though, it is up to you, the buyer, to ensure that the car you are being offered is exactly as it is described. There are exceptions here: if a car has been deliberately misdescribed, the auction site has the right to cancel the sale and ban the seller from selling with them again.

The Market notes on its FAQ page for buyers that if purchasers find that the car they have bought has some substantial problems (the examples it gives are major panel damage or an inability to change gear), they will look into the matter on your behalf.

If the car clearly doesn’t match the way it was described on the site, you may be protected by the 1979 Sale of Goods Act. Definitely have a read of each site’s terms and conditions to see how they will act in the case of a blatant false description.

Finally: get some classic car insurance

We mentioned it before, but we’re going to stress again the need for some insurance as soon as you purchase your vehicle, and definitely before you first take it out on the road.

Classic auto insurance is something we’d always recommend for a car of a certain vintage – it is an important part of safeguarding your investment and protecting it through the remainder of its life, so it can be enjoyed not just by you but by any future owners.

The need for insurance becomes even more acute when you are buying a car from a third party – and, in many cases, a car that you won’t actually have got up close and personal with before buying. It’s difficult to be aware what repair and restoration jobs the vehicle may need in the future, and you’ll be in a strong position if you have some classic car insurance that may be able to help bear some of the repair costs that you might incur.

We hope that you have an exciting time browsing the UK’s online classic car auctions, and that you end up with the classic vehicle of your dreams. When you do take ownership of your classic, we’d love to provide the classic car insurance that you’ll need.

Benefits of insuring through a specialist like Lancaster can include:

• Choice of repairer
• Two-year agreed valuation
• Laid-up cover
• 24-hour helpline

Contact us for a quote today.

Policy benefits, features and discounts offered may very between insurance schemes or cover selected and are subject to underwriting criteria. Information contained within this article is accurate at the time of publishing but may be subject to change.