Lovett reckons he has traditional auction houses on the run. “We’re taking a lot of their business and that percentage is growing daily,” he told Autocar.
He makes the comparison with Purple Bricks, the flatfee online house seller that undercuts traditional estate agents. Collecting Cars charges the buyer, instead of the seller, at the rate of 5%, limited to £5000 per car. “If you go to the traditional competition, the fee might be £20,000 or more,” he said. Word of mouth, particularly among the Porsche and Land Rover Defender communities, has helped his business enormously. “When we sell a Porsche GT3, for example, news about what that car sold for seems to get around very quickly,” he said. “It’s a real life data point rather than an asking price in the classifieds.”
Of the 4748 cars sold on the site in 2021, Porsche was the most represented brand with 856, followed by Ferrari (404).
Sites such as Collecting Cars, Bring a Trailer and others try to install an auction-house level of dignity to the process. Sellers are encouraged to be detailed with the description and upload multitudes of photos. A photography service is offered. Shady practices employed on some sites, such as shill bidding (bidding up your own item) or ‘sniping’ (using software to automatically insert a final bid in the dying seconds), are banned, the latter by extending the auction’s end by two minutes if a last-minute bid is put forward.
Bring a Trailer injected an element of social media into the process, allowing people to comment on bids and see messages from the seller. Collecting Cars has adopted the same theme, although you need to be a registered bidder to chat.
Auction companies are realising that their business model is under threat from this much improved online buying process. Last year, Bonhams bought online car auction site The Market, which operates in much the same way except that the seller pays, not the buyer.
Meanwhile, Canadian based auction company RM Sotheby’s, in response to the pandemic, rolled out its Open Road series of online auctions, which oversaw sales totalling $33.28m (£24.8m) in 2021, according to the company.