Online auction for vintage cars is the new craze, but how does it work?

Online auction for vintage cars is the new craze, but how does it work?

When it comes to auctioning vintage cars, things are not as simple as just putting some pictures up online.

While online auctions for vintage cars are very common abroad, India is just about stepping into this space. While online auctions for vintage cars are very common abroad, India is just about stepping into this space.

Clint Eastwood's 1989 movie 'Pink Cadillac' was all about an exquisite 1959 Cadillac Series 62 convertible. While the movie was not a hit, you could not take your eyes off the car. And that image lives on. Now, what if someone told you that you could buy that car right now in India?

Well, you can. All you need is about Rs 1.2 crore, or a little more, and you need to bid for it. If you think you are up for that, head over to the 'Historic Auctions' website. Besides a pristine 1959 Cadillac Series 62 convertible, there were 18 other cars up for sale. While their auctions for this set ended last month, more cars are going to put up for sale soon and if you have the capital, it's all fair game.

It's not just Historic Auctions which is conducting bids for vintage cars. Big Boys Toyz, a name better known for luxury cars, also has an auction ongoing for 19 other cars on its site, and the bids for all of them close on January 8.

While online auctions for vintage cars are very common abroad, India is just about stepping into this space, thanks to the ongoing pandemic situation. There were a few online auctions for vintage cars that did happen in the past, hosted by Saffron Art and Astaguru, but without much success. Currently, Historic Auctions and Big Boys Toyz are working on organising this sector and making it more accessible to the enthusiasts.

However, the auctions are not as simple as getting a few old beauties together and making their photos available online. The vintage car space in India is an exclusive, niche one. The car owners all know each other and all the cars are usually bought and sold within that circle. Also, when you expect buyers to invest lakhs and crores on a car, there's a lot of homework to be done.

Diljeet Titus, founder and managing partner of Titus & Co., Advocates; and governance advisor at Historic Auctions, is a very well-known vintage car owner and owns a museum dedicated to his collection. He said there are at least four things that he looks out for when looking to buy a vintage car.

A list of conditions, values and the Hagerty scale

For starters, as Titus pointed out, there are things that every car collector must look out for when they are buying a car "sight unseen" on an online auction. Buying a vintage car "sight unseen" and online could be tricky, said Titus, since one is not physically able to see the car and inspect its condition. In a situation like this, one of the first things that he looks out for is the people behind the auction. "The credibility and the reputation of the people who have founded the auction house is one of the first aspects to look out for," he said.

The second aspect is the collection or curation that has been made available for the auction. "Do the cars on offer span across eras like pre-war, American pre-war, post-war American, European, etc, and also engine sizes. The cars on sale matter," he said. "It has to be an eclectic mix of cars, it can't just be foreign cars with no inclusion of Indian heritage cars. Collectors like to buy cars across all classes."

The third and probably the most important aspect is the condition and physical inspection report. "This is very, very critical when you are buying at an online auction," said Titus. "The condition report of a car is dependent on whether the auction house has done a proper assessment and evaluation of it and then produced a report which the buyer can ask for," he explained.

The condition report of a car gives an assessment of the condition of the body, paint, chrome, mechanicals, electricals, interiors, upholstery, running of the car, steering, gear changing, etc. This is what allows a buyer to get a good understanding of how the car can be rated on a scale of one to five, where one is 'concours' (cars that have its interiors, paint, plating, mechanical restoration, etc., at a standard that is far higher than that of the car when it was new) and five being 'poor', one that needs complete restoration.

The fourth thing that is important for online car auctions is a lot of detailed photos of the interiors, exterior, underbody of the car, close-ups of rust, damage, etc, which will give the buyer an idea of the exact condition better.

"The collector car hobby is an investment hobby. Classic cars are the only cars that you will ever buy that will never depreciate," Titus added. "So, it is very important to have these things in order. You want to be absolutely sure about what you are buying and there are no surprises."

As Titus suggests, sometimes it is good to have a friend go take a look at the car if it is physically available for viewing, even take a test drive if possible. This is something he recommends even if all the other four things are in order.

Another thing that is critical is whether the car is imported. Vintage cars sell at very high values and they are often declared in the country at lower values when they are imported. "It is critical to ensure that the full value of the car has been declared and the full duty has been paid," Titus pointed out.

If you buy a car on which the duty has not been fully paid, then at any point in time, that car can be confiscated if the department of customs finds out. Payment for the car should be made only when the buyer is satisfied with the right value of the car having been declared. In case where a deposit has to be made before one can participate in the auction, something that Historic Auctions and Big Boys Toyz both follow, a buyer needs to get the auction house to clarify this.

Finally, the documentation and registration of the car being sold must be up-to-date and not expired, including the special provisions for the registration of vintage motor vehicles that were notified in July last year. This list of needs and expectations is standard, at least it should be, for both buyers and sellers when it comes to vintage cars.

Besides these simple things, there is the 'Hagerty Valuation Tool'.  It is an international standard for evaluating vehicles of all sorts and it is a list most auction houses adhere to before putting a vehicle up for sale, including Historic Auctions. As Titus explained, if an auction house adheres to the Hagerty list, you will know they are reliable and fit to be trusted.

The buyers club

On the other side, there are also certain things that an auction house checks for when approached by a buyer. For starters, both Historic Auctions and Big Boyz Toyz need the interested buyers to make an initial deposit to show their seriousness. While Historic Auctions needs the buyer to deposit 10 per cent of the amount they intend to bid, Big Boys Toyz has two plans on offer.

The Enthusiasts Plan, which is priced at Rs 1 lakh, allows bidders to bid on two cars valued up to Rs 50 lakh, while the Connoisseur Plan, priced at Rs 2 lakh, allows bidders to bid on four cars with no upper limit on car values. Both the deposits are refundable or the buyer can choose to use them in the next auction.

As Siddhraj Singh, Chief Operating Officer at Historic Auctions said, there has to be 'due diligence' that needs to be conducted by auction houses for buyers too. "You don't want people who are not serious to come in and raise the bid amounts, that is why we have put in the need to deposit money and complete your KYC before you are allowed to bid on the platform," Singh explained.

While most buyers and sellers know each other in this very closed vintage cars community, new buyers and enthusiasts are always coming on board. One of the main reasons for taking auctions online is to open the community to more people with genuine interests.

Organising a disorganised sector

As Jatin Ahuja, founder and MD at Big Boys Toyz, said, "The vintage and classic cars is a multi-billion dollar industry in the US and the UK, and this must come to India too. While some people have tried at a very small scale, it is a totally unorganised business that we are trying to organise."

Ahuja's company is best known for making luxury cars available in India, but why take an auction route for these vintage cars?

"It is very difficult to derive a fair valuation of every vintage or classic car. The best way to do that is through auctions. We can always have a tentative valuation, like a 1930 Buick GS might be valued between Rs 60 lakh to Rs 70 lakh, but that price might actually be Rs 60 lakh, Rs 69 lakh, maybe even Rs 75 lakh, or Rs 55 lakh - that the customer can decide and that's what we believe is the right way to go ahead with the pricing of these vehicles," Ahuja explained.

Ahuja took the digital route for these vintage car auctions since "everything is moving towards digital" and Big Boys Toyz has been selling other cars online throughout the pandemic. In fact, he said that about 80 per cent of the company's sales over the pandemic have been online.

Like they do with their classic cars, buyers are free to ask for a virtual video tour to understand the condition of the car better. This is something Historic Auctions also delivers if requested by a buyer. Big Boys Toyz has vintage cars expert Aditya Malik on board to help valuate the cars being auctioned, while most of the board members at Historic Auctions are experts in the field, including Chairman Manvendra Singh Barwani (founding member of the Vintage and Classic Car Club of India. Singh has also been a curator for the Cartier Travel with Style Concours d'Elegance in India), Vice Chairman Madan Mohan (founder and managing trustee of the 21 Gun Salute Heritage & Cultural Trust), and others.

Essentially, both the auction houses in this case include well-known vintage and classic car enthusiasts who are looking to open their community to more people. "The idea is to increase this community and give people enough trust in us...the ones who do not know us, to come register and invest in a vintage car online," Siddhraj Singh explained, adding that once a purchase is made, Historic Auctions also helps the buyer register the car and get the paperwork in order.

The tech experience

Another important thing that needs attention is the process of online auction and how it is being conducted. Both Big Boys Toyz and Historic Auctions require interested buyers to register themselves, make a deposit, and start bidding. Once the auction goes live, the bids placed can be seen real-time so as buyers can keep a track of the new limits they need to compete with.

Historic Auctions, for example, has a helpline in place that buyers can call if they want to increase their bid amount and the deposit they have made is 10 per cent of a previous amount they had intended to bid. Big Boys Toyz, on the other hand, allows people to bid as much as they want after their initial Rs 1 lakh or Rs 2 lakh deposit.

On the website front, it has to be ensured that the tech is in place to handle the traffic, which is the highest on the first day and the last day of the auction, according to Singh. "You also need your site to be secure so as people cannot hack in and mess with the bids, of course," he added.

While the main push behind taking vintage car auctions online is to open the community to more people and 'organise' the sector, what is going to remain the key in the whole experience is the customised attention each buyer gets from the auction house in a market that right now is very small, and also the after-sale experience. After all, when you are expected to invest crores on something you have not seen or driven, something else definitely has to give.

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