18 September 2015

The Great Auburn Debacle of ’15: An exercise in humility and the unpredictability of markets

I blame the airline. Yeah, that’s it. It was the airline, which lost my bag at O’Hare for a day. I tweeted them about it (#grrrr!), because they had me shopping at a lonely do-it-all grocery store at midnight for undies and $3 polos. I accidentally left the deodorant on the bagging table, but I couldn’t muster the energy to head back over there at 1 a.m. So I lost $3.99 on that, which, in retrospect, was another early sign that failure was afoot.

Plus, I smelled bad.

You know how disorienting all of that is, right? Ruins your whole trip.

I need to blame something, because all I wanted from that trip in early September — the only thing I wanted, in my gut — was to sell a car with Auctions America at Fall Auburn and do well on it. Not just “OK,” but “well.” Secretly, maybe even “very well.”

And I did sell it, eventually, lot 3025, the Signal Red 1973 Mercedes-Benz 450SL — 98,000 original miles, two tops, great paint, clean MB Tex interior, Becker Europa II stereo, recent service on a 4.5-liter V-8 with plenty of smooth power to give. The only real knock I could see was some surface rust on the driver’s side door sill. Offered at no reserve, it crossed the block right around lunchtime on the auction’s second day, Friday. I watched it cross the block with my own eyes, and in my own clothes, even, though I’m not expecting my bag fee back from the airline anytime soon (#refund?).

What I’m getting at here is that the whole thing went south, real fast. Quick as a gavel, in fact. SOLD!

For the bargain basement price of just $3,200. Oh, hey, I just lost $1,800 on a $5,000 Mercedes I bought in July. I’d fire me.

# # #

Full disclosure, Hagerty Insurance is a sponsor of the Auctions America Fall Auburn sale. But my being there with a Mercedes to sell had nothing to do with the sponsorship and everything to do with making a sweet video about buying cheap classics on Craigslist and then selling them at auction.

I was not alone in this foolish endeavor, either. I had two accomplices, each of us having scoured Craigslist with $5,000 to spend on a classic to consign to Auburn, each of us confident that our classic would hammer sold for the most money. Each of us vying for bragging rights, and each of us expecting to make a profit.

So the Friday noon hour arrived at Fall Auburn, broadcast live in glorious HD on auctionsamerica.com for all of the world to see. For all of our Hagerty coworkers to see. For all of the bosses to see.

Here’s my best stab at a Bronx Cheer: Blprprprprprppp! Here you could also substitute the loser sound from “The Price is Right.” Any and all sound effects that convey failure are appropriate now.

And I wasn’t even the biggest loser, either, which I can assure you was not the sweet video we were trying to produce. Nobody goes to an auction trying to lose 36 percent on a five-week investment. Or even twice as much, like my sad friend Matt did on his Chrysler’s TC by Maserati. Meanwhile, my happy friend Brad made $700 on a 1963 Corvair Monza convertible, so good for you, Brad, on your Pyrrhic victory.

I don’t think I was out of line to think the Mercedes could have done well on the auction block. By all accounts, the R107 SL, built from 1973 to 1989, is an attractive, well-engineered European roadster. Yes, a gazillion of them were made in the car’s 18-year production span, but only the ’73 sports elegant, small chrome bumpers. Forever after, they were all furnished with excessively clumsy 5-mph “safety” bumpers. I had purity of form on my side, or something.

No one else thought I was out of line, either. Before I actually bought the thing, I consulted experts. Real ones who follow the market for old cars, guys who know it inside and out and understand what’s on the rise, and why. I checked three different valuation guides, including Hagerty’s own. Not one of them lists a low price lower than $10,000 — which, you’ll recall, is twice what I paid for my Mercedes, a garage-kept car I rated as a “very good driver.”

Before I forked over the cash, I even checked the Auctions America website, and at that point, just one other SL had been consigned. I saw dollar signs. I envisioned profit and charitable donations from my excesses. I made bold predictions to anyone and everyone who’d listen about my surefire bet, my rock-solid investment. What could possibly go wrong?

Everything, apparently.

# # #

It is hot in Auburn, Ind., sticky. I knew that before ever setting foot in the place, because I grew up in the Midwest. I know how the late summer unfolds in corn country. What I didn’t know, however, and what I quickly learned as I sweated my way among the nearly 1,000 consignments for Fall Auburn, is that another 10 R107s had been consigned to the auction in the weeks between my purchase and auction day. Twelve in all, with eight 450s, including another example from 1973. Lots of choices then, but buyers want options, right? Still, my ’73 appeared to be in better overall condition than the other ’73. Better paint, better interior, nicer top. I wouldn’t say my confidence took a nosedive, but I recognized that perhaps my SL wasn’t as “standout” as I’d hoped it would be.

Undoubtedly, there are plenty among you who are exceedingly pleased by all of this and feel that I got what I deserved. That classic cars are for driving and enjoying and not to be used as investments. That it’s guys like me who are driving up the prices of the cars you love. And I’ll allow that, because I mostly agree. I’d much rather own a car long term to drive and cherish and share with friends and loved ones than to have one simply as a “flipper.” Clearly, I’m terrible at it.

But collector car auctions, like any auction for any commodity, help to set the market for the objects we love. I simply wanted to test that market with what I considered to be a winner. Just as Matt did with his, um, Chrysler’s TC by Maserati, and Brad his Corvair.

And what I learned, in the hardest, gut-wrenchingest way possible, is that there is no surefire bet. Nothing turns “rock-solid” into quick sand faster than bidders who don’t love your car as much as you do. There’s no guarantee that your SL isn’t going to be one of a dozen to choose from. More importantly, as it applied directly to my situation on auction day, that it isn’t going to be the fourth 450SL offered before noon on Friday. Buyers had choices, and perhaps the savviest among them spotted something I hadn’t. Perhaps small bumpers mattered less than a fresh repaint, as was the case with lot 3021, a ’79 that proceeded my own car by just four lots. It sold for $9,600.

Or, heck, maybe it really was the airline. That seems the easiest explanation, anyway. Though, to be perfectly honest, as the bidding stalled and the hammer fell at $3,200 on my $5,000 Mercedes, I wished they’d lost me in Chicago, too.

You can watch all of my pride, pain and suffering in HD at https://www.youtube.com/watch?v=5Ufb-YAbskQ.

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