How an auction actually pays
Two prices matter: the hammer price and what lands in your account. Between them sit the entry fee and the seller's commission, plus getting the vehicle to the auction site and back if it does not sell. On a mainstream car, those costs can consume a meaningful share of any premium the auction achieves over a direct offer.
The reserve trap
Set the reserve too high and the car passes in. You have paid the entry fee, spent the time, and still own the car, usually with a note in the auction record that it did not meet reserve. Set it too low and you are exposed to a thin room on the day. Auctions reward sellers who genuinely know their car's market value, which is a reasonable argument for getting written offers first even if you intend to go to auction.
Where auctions win
- Enthusiast and rare vehicles, where two determined bidders can push well past any trade price
- Fleet and volume disposal, where the efficiency of clearing many vehicles at once outweighs per unit price
- Cars with a specific collector following that no single dealer would pay retail money for
Where dealer offers win
- Ordinary passenger cars, SUVs and utes, which is most of the market
- Any situation where you need to know the number before committing
- Sellers who cannot transport the vehicle to an auction site
- Cars with finance owing, since settlement is cleaner through a dealer purchase
The sensible sequence
Get the written offers first. If your car is mainstream, they will usually be at least as good as an auction result after fees, with none of the uncertainty. If your car is unusual and the offers come back well below what you believe the market is, that is a genuine signal an auction may find a buyer that the trade cannot.