I heard a stunning statistic while visiting one of the collector car auctions taking place during the recent Monterey Car Week. So stunning, in fact, that before reporting it, I had to verify the numbers.
An official of one of the auction companies mentioned that the company would do more business in a single weekend on the Monterey Peninsula than the typical new car dealership does in an entire year.
Is that possible? Can a collector car auction generate more in total sales in a single weekend than the typical new car dealership does in 12 months?
Turns out, it is true.
I contacted an editor at Automotive News, the weekly newspaper that covers the automotive production and sale industries, and she responded that according to the latest statistics released just last week by the National Auto Dealers Association, the average new car dealership generated $59.6 million in sales in 2016.
Of the six auctions taking place during the recent Monterey Car Week, two exceeded that $59.6 figure and a third was less than $3.2 million shy. A fourth did $34 million, which in new-car terms would be about half a year’s sales.
Let’s put it another way: The average new car dealership does about $1.15 million in sales per week. So does a classic car auction each time it sells just one 300 SL or Shelby Cobra or F40 or 959 or…
The NADA’s $59.6 million dealership is based on the average store, which in 2016 sold 928 new vehicles at an average of $34,449, plus used car sales, F&I (finance and insurance) and, I presume, service operations.
Note: According to the NADA, the average dealership’s pretax profit margin was just 2.5 percent, down from the previous two years, and in large part because of increases in rent, advertising and other expenses, especially salaries for service personnel. Like classic car restoration shops, new car dealerships face a shortage of skilled technical staff.
While the average collector car auction does not sell nearly 1,000 vehicles in an typical weekend, the average transaction price for collector cars tends to be well north of $34,500. For example, at the recent Monterey sales, the average selling price for collector vehicles was nearly $440,000, and the median price was more than $90,000
One more set of stats: According to the NADA report, the average used car sold in 2016 at new-car dealerships went to its new owner for $19,866.
But with the exception of an occasional 001 VIN being sold for charity, all of the cars sold at collector car auctions are, technically, “used” vehicles. So while volume is nice at new car dealerships, for collector car auctions, those six- and especially seven-figure transaction prices add up very quickly — and very nicely, it seems.