SOUTH AFRICA – AUCTIONS BECOME A FAMILY AFFAIR
Auctions at Burchmore’s have become real family affairs. And, whereas the auction arena used to be frequented almost exclusively by dealers, it’s now common to see private buyers cramming into the seats.
The reason for this trend is two fold. Firstly, at this time of the year families are typically seeking mom’s taxis and student cars. As such, there are two distinct buying groups at each and every auction – looking for these vehicles specifically.
Secondly, private buyers have now come to realise that auctions offer real value for money – because they are bidding against the trade. The latter is not just marketing talk: it has been proven at recent auctions.
The first group of buyers – namely those looking for mom’s taxis – typically have children who are starting school or they are conscious of the fact that they will be involved in lift clubs. According to Darryl Jacobson, managing director of Burchmore’s, these buyers typically want a reliable people carrier with as many safety features as possible. Value for money is very important. “They are looking to see what savings they can experience over a new vehicle,” he reveals.
And there is absolutely no doubt that the savings can be nothing short of remarkable. A typical upmarket mom's taxi from one of the manufacturers will cost over R400 000 new - but Burchmore's regularly knocks down these cars for R220 000.
The second group of buyers – those looking for student cars – typically have children who are going to university at the beginning of 2013. Mileage is not a relevant issue – buyers understand that, with advances in technology and build quality, cars are more reliable than ever. So the previous trend – whereby used car buyers were hesitant to look at a vehicle that had done over 100 000 km – is now a thing of the past.
Having said that, buyers in this category do want a car that is in good condition, and they will often bring along a mechanic to verify that this is the case. They are fans of the auction process at Burchmore’s because – unlike many other auction houses – the cars are actually driven past bidders in the auction arena. At most other auction houses, the auctioneer walks from car to car (and the vehicle doesn’t actually move).
Student cars typically cost upwards of R100 000 when acquired new. However Burchmore's regularly knocks down student cars for R50 000 – reiterating the value-for-money proposition at this auctioneer yet again.
And, as Jacobson explains, this is precisely the reason why the auction arena at Burchmore’s is always choc-a-block at each and every auction. “It’s all about value for money – and the differential between new and used. When buyers see a massive saving, the car becomes a proposition,” he notes.
Buyers today are extremely well informed – so they generally know whether or not they are getting a good deal. “They come to Burchmore’s, having done their homework. They understand exactly what they should be paying,” says Jacobson.
On the other hand, sellers on auction obviously want high prices. Jacobson is realistic in this regard. “They want high prices; the buyers want low prices. This business is much like real estate: somewhere in the middle, a deal is concluded,” he notes.
Of course, the big advantage for buyers is the fact that they are bidding against a dealer, who will then recondition the vehicle to mark up the car and sell it. “Private buyers can save the dealer margin and they recondition the car to their standards, which may or may not be as high as a dealer,” explains Jacobson.
Significantly, customers can also buy a warranty at Burchmore’s, which is available from day one.
This can mean thousands of rands in savings. “These savings are the reason why we are attracting so many more people at auctions. There is no doubt that the private sector is now in attendance more so than ever before (versus dealers). Years ago, 70% of attendees at auctions were dealers and 30% were private buyers. Currently 70% are private buyers and 30% are dealers. The same number of dealers are coming through – but we are getting many more private buyers at our auctions,” concludes Jacobson.
So don’t be surprised if you see Mom, Pop and the whole family at the next Burchmore’s auction.