Buying a classic at auction: fees, write-off categories and what the catalogue does not say

Auctions have become the default way classic cars change hands in Britain, and a softening market has pushed more of them through the salerooms. Saleroom results are also where the evidence about what cars are really worth now lives, because they are prices somebody actually paid rather than prices somebody hoped for.

It is also a buying environment with its own rules, several of which are counter-intuitive, and one that penalises the assumption that a car sale is a car sale.

The hammer price is not the price

Start with the arithmetic, because it decides your maximum bid.

Buyer’s premium is a percentage added to the hammer price, paid by the buyer to the auction house. VAT is normally charged on the premium as well, so the effective addition is larger than the headline figure suggests. There may be further charges: an administration or documentation fee, storage if you do not collect promptly, and in some sales a fee simply to register to bid.

Rates differ between houses and change over time, which is why no article should quote you a number. What every buyer should do instead is work backwards: decide the total you are willing to part with, then subtract premium, VAT on the premium and fees to arrive at the highest hammer price you can afford. Bidders who do the sum forwards discover the difference on the invoice.

The same arithmetic runs in reverse when you are reading results. A published price may or may not include the premium, and comparing a premium-inclusive result against a private advertisement is not a like-for-like comparison.

Two other mechanics worth understanding before your first sale. Most lots carry a reserve, below which the car will not sell, and it is not usually published; a lot that “did not sell” reached bidding below that figure rather than attracting no interest. And many houses require a deposit or registration to bid at all, which is refundable but ties up money on the day.

Write-off categories, and the V5C trap

Classic cars at auction include repaired accident damage, and the categories are worth knowing precisely.

The current system has been in place since October 2017, when it replaced the older Category C and D scheme. The four categories are:

• Category A: must be crushed entirely. Nothing may be salvaged.
• Category B: the body shell must be crushed, though other parts may be salvaged.
• Category S: repairable, but the damage was structural.
• Category N: repairable, with non-structural damage.

Only S and N can lawfully return to the road. A Cat A or Cat B lot is a parts purchase, not a project, whatever the description implies.

Here is the part that surprises people. DVLA does record the category in the log book, but the routes differ. For a Category S vehicle the keeper sends the complete log book to the insurer, and a re-issued, marked V5C follows. For a Category N vehicle the keeper simply keeps the existing log book.

The consequence: an ordinary-looking V5C is not proof that a car has never been written off, and it is least reliable for Cat N. Nor does the free government vehicle check help here, because DVLA’s service does not report write-off or salvage status at all. It returns tax, SORN, MOT expiry, first registration and the like, and nothing about insurance history.

Write-off records live on an insurance-industry database rather than with DVLA, and reach buyers through commercial history checks. For an expensive car, that check is worth its small cost before bidding, not after.

One more thing that changed and is widely misreported: since October 2015 there is no mandatory Vehicle Identity Check for a repaired write-off returning to the road. The only requirements are the ordinary ones, being roadworthy, taxed, insured and with an MOT where required. Nobody official inspects the repair. That responsibility is entirely yours, and it is why structural repairs deserve the same scrutiny described in our guide to rust and repair standards.

Reading a catalogue description

Catalogue entries are written to sell, usually from information the vendor supplied, and they are the buyer’s main source of information about a car they may never touch. Some conventions are worth decoding.

Descriptions of history tend to be precise where the news is good and vague where it is not. “Restored” without dates, receipts or a name attached is a claim rather than a fact. “Believed” and “understood to be” are doing real work in a sentence and signal information the seller cannot evidence. An honest catalogue will say what is not known, and the better houses do.

Mileage is described as recorded rather than warranted for good reason, and on a car old enough to be MOT exempt there may be no recent independent record of it at all. What can be checked, free, is the MOT history, which shows recorded mileage at each test back to 2005, along with advisories that often describe the car more honestly than any catalogue.

Bidding on a car you have not seen

This is the genuine dividing line in modern auction buying, and it is worth being honest about the risk rather than pretending photographs solve it.

Viewing days exist and are worth the journey for anything expensive. Where a car cannot be viewed, the questions to answer before bidding are whether the car has been independently inspected and by whom, whether there is a documented history rather than assertions, and whether the photographs show the areas that actually matter, meaning underneath, inside the wheel arches and the closed structure, rather than a three-quarter view in good light.

A useful discipline that experienced buyers apply: set a value below which you are willing to accept the unseen risk, and above which you are not. That figure is personal, and the point is to decide it before the bidding starts rather than during it.

The failure mode is not usually fraud. It is that a car described accurately by somebody who was not looking hard turns out to need structural work nobody mentioned, and the cost of finding out is the cost of a restoration rather than the cost of a service.

After the hammer falls

Winning is the start of a short administrative process with tight deadlines.

Payment is normally due quickly, in cleared funds, and by a method the house specifies. Storage charges begin sooner than most buyers expect, often within days, so arranging collection before you bid is sensible.

The car will not usually be driveable away legally without your own arrangements: it needs to be taxed and insured in your name, and to have an MOT where one is required. For a car that has been standing in a saleroom, transport is usually the right answer regardless, for the same reasons set out in recommissioning a car after storage.

Check what documents are actually being handed over, at the point of collection rather than later: the V5C or an explanation of where it is, any history file described in the catalogue, and both keys if two were advertised.

Where auctions genuinely help

None of the above is an argument against buying at auction. A saleroom compresses the market into a single afternoon, publishes what things actually sold for, and occasionally sells a good car cheaply because the right two people were not in the room.

What it does not do is protect an unprepared buyer. The homework is front-loaded: know the model’s weak points, run the free checks, read the conditions of sale, work your maximum bid backwards from the total cost, and decide in advance what you will not do. Then the compressed afternoon works in your favour rather than against you.