Do Online Auctions Mark a New Era in The Classic Car Market?

Under the umbrella of a global pandemic, the world is a changing place. Just look at Draft Kings, which experienced a 114% growth in its stock price since March 2020. And back in January 2021 the online community WallStreetBets made waves in the stock market by instigating a grass-roots based short-squeeze all from the comfort of their collective homes. Heck, even my grandmother now knows how to host a Zoom meeting. One doesn’t require soggy tea-leaves to see the bigger picture: people are finding new and interesting (online) ways to spend both their leisure time and their money. The classic car market is no exception. In this post, we explore the growth of online classic car auctions during 2020-2021.

“Hello, and Welcome Back”
Classic Car Auctions during the Pandemic

Long before coronaviruses were a topic of everyday discussion, car enthusiasts were learning about “Bring a Trailer” – who sold their first car via online auction in 2014. For years, even as more online auctions like PCARMARKET came online, many viewed it as an interesting novelty, but nothing that would upset the status-quo of the classic car world. The auction world went to bed safe and secure in February 2020, while visions of Amelia Island danced in their heads… then came the paradigm shift.

It should come as no surprise that the number of cars sold at live auction* in 2020 plummeted by 29%. Given the global shutdown, the greater surprise should have been that this drop wasn’t more dramatic. The encouraging trend for 2021 is that sales at live auction events are back to almost pre-pandemic levels. The even bigger trend, of course, is in the online market.

Who would have guessed that all it would take was a 21-month global pandemic to enact the evolution in car buying we’ve all been waiting for? The number of cars sold at online auctions** in 2020 increased 63% over 2019 – what else were buyers going to do while quarantining at home, with saved-up vacation funds burning holes in their pockets and a yearning for freedom lurking in their not-quite-subconscious? In fact, sales at online auctions not only picked up the slack left behind by cancellations of many live auctions in 2020, it contributed to an overall increase in the total number of cars listed. The 38,846 total in 2019 was surpassed slightly by the 39,085 listed in 2020, although more sold in 2019 than 2020 (27,116 vs 26,823). 

As we look back at 2021, it’s encouraging to see that sales at live auctions have returned to pre-pandemic levels. We are out of the woods, and online auctions should, once again, be taking a back seat to their live counterparts, right? Well, it seems that online auctions have enjoyed their moment in the sun and are hesitant to “give up the ghost”. In fact, while you could count the number of online-only auction houses on one hand in 2019, it seems a new one launches every month now. Statistically, in 2021, online listings grew by almost 100% and for the first time ever surpassed the total listings at live auctions. The question remains, what types of cars are selling where, and who is buying them?  

“Hello and Welcome to the Party”
Total Sales, Live vs Online Auctions

Even though online transactions accounted for 59% of the total number of listings sold in 2021, they accounted for only 46% of the total dollars spent. This data is interesting in the fact that it works out to an average of $72,217 spent on each car purchased in a live auction and an average of $43,112 spent on each car purchased online. 

The short explanation for these new trends is that when buyers are spending almost twice as much, they want to see what they are buying in person. The longer the string of zeros attached to the end of a price tag, the more likely it’ll be for the buyer to want to be present for the experience rather than rely on photos and videos. Conversely the lower the risk, the lower the enthusiasm for wearing pants whilst purchasing your new vehicle. While there are a growing number of sales that show people are willing to spend over 6-figures online, this is still a battle that the online auctions have to fight. 

So these graphs are telling us two main facts:

  1. We are seeing a lot of new buyers in the world of online auctions
  2. Purchasers at online auctions are spending less on average than their counterparts in the live auction community. 

But who are these new players in the game? While our data doesn’t directly tell us this, there’s a lot of inferences that can be made. As stated at the beginning of this article, people are finding new and interesting ways to spend both their leisure time and their money amidst the pandemic. Millennials and Gen-Xers who now have disposable income are testing the waters of clubs usually reserved for Baby Boomers and their parents, and these new generations are more comfortable transacting online, in fact they prefer it. The cars of their youth (80’s and 90’s) are also still pretty affordable. There can be little doubt that the upturn in online auctions is democratizing access to the collector car market. 

Every enthusiast has the tale of the first car they purchased. Every collector has their story of the car that got them into the hobby. Go to an auction where the oral tradition of one’s “first” is almost an art form. The bios of most writers in the community will add the parable in as a credential. It’s safe to say much like the total sale of vehicles, the global sum of these “first purchase” stories are now on the rise. Let us be the first to say, “Welcome to the party!”

* 'Live auction' refers to an auction event that is timed with start-date and end-date. These may be run online and/or at a physical location. Examples of these include auctions run by: Bonhams, Gooding, RM Sotheby’s, etc. 

** 'Online auction' refers to an auction house that is run 100% online, with no physical presence. Examples of these include: Bring a Trailer, PCARMARKET, Collecting Cars, Cars & Bids, etc. 

Data as of December 31, 2021

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