Used Car Auction Bids on The Rise

A black 1957 Ferrari 250 Testa Rossa sold here Sunday for $12,402,500, setting a new record for the highest sale price at a public auction.

“The car set a new auction world record as the most expensive motor car ever to be sold at auction,” said Amy Christie, a spokeswoman for RM Auctions, which conducted the third annual Ferrari Leggenda e Passione sale.

The immaculate machine actually sold for a “hammer price” of €8.2 million. But with a buyer’s premium of 10 percent, the official sale price was €9.02 million — or $12,402,500 at current exchange rates, Ms. Christie added.

The price was €1.98 million higher than the previous auction record, which was set at the same sale last year. The record previous to that, for those keeping score, was set at the 2007 edition of this Ferrari-sanctioned event.

Fears that a worldwide recession might negatively affect the high-flying world of collector car prices — at least as they relate to Ferraris — proved mostly unfounded. Although several vehicles offered for sale failed to meet reserve prices, many did sell — and at strong prices.

“There were some disappointments,” said Dan Abernethy of Sotheby’s auction house, which produced the event with RM, “but all in all it was a very strong event.”

Perhaps an example of what Mr. Abernethy was referring to was a 1967 Ferrari 330 P4 racecar that failed to make its reserve price (the minimum amount at which its seller was willing to let it go) despite earning a bid of €7.25 million. That would have actually broken last year’s record price, too. Auction officials said they were continuing to meet with the high bidder and seller to make a deal. “They were very close,” Ms. Christie said.

A 1956 Maserati 250F in which Stirling Moss won the Monaco Grand Prix also failed to sell, despite pulling bids over $2 million.

The Testa Rossa, which in Italian refers to the red cylinder-head covers on its V-12 engine, had been forecast as a likely record-breaker before the auction. The car had a solid, if not legendary, career on the racetrack, winning 10 of 19 races in 1958-61.

The Leggenda e Passione, or Legend and Passion, event is the only auction of its kind, dedicated solely to the Ferrari and related Maserati marques and held at Ferrari’s Maranello factory grounds with the official imprimatur of the automaker. Several dozen pieces of memorabilia from the company’s private collection were also sold here, including racing team uniforms, tools, parts and press materials. The auction concluded a week of special tours, parties and driving activities at Ferrari’s private Formula One test track for registered bidders. A crowd of nearly 1,000 attended.

The auctioneers did not immediately disclose the identity of the winning bidder, other than to say it was someone represented by an agent who phoned in bids on his behalf. Another telephone bidder and several bidders actually present in the auction arena engaged in a spirited exchange that started at €4 million and eventually topped out at more than double that amount.

“I do think there is a lot of good money out there still for great cars priced right, especially cars new to the market,” said David Gooding, principal of the rival Gooding & Company auction house, who was among those attending. “There has been a correction in the market, to be sure. Sellers and auction houses have to be astute in their pricing — myself included — and not be unreasonable.”

Used Car Auction Bids on The Rise

Many auto dealers selling new cars have expanded their used-car offerings over the past year, bidding up prices at used-car auctions that then get passed along to consumers.

And the bidding may be about to intensify.

With Chrysler and General Motors last week notifying some individual dealers that they will sever ties, the news will cause some affected dealerships to devote all their efforts to used cars.

"It creates a tight market for used cars at auctions, so auctions have less good inventory, and it's causing the price of used cars to go up," said Joe Bradley, owner of Bradley Motors in Hudson.

New-car sales plunged 27 percent in New Hampshire for the first three months of 2009, meaning fewer used cars are becoming available through trade-ins.

Dealers who sell new cars "may be focusing more on the used-car end of it than they ever have before," said Peter McNamara, head of the New Hampshire Automobile Dealers Association.

Some franchise dealers have told McNamara that they are close to selling as many used cars as new ones.

Last week, Chrysler notified six Granite State dealerships it would terminate their franchise agreements early next month. And General Motors announced an 18 percent cut in the number of dealerships nationwide, with another 10 percent to be sliced later.

McNamara said three New Hampshire GM dealers -- one more than Friday's count -- have notified him that they have received franchise termination notices effective next year, including AutoServ Buick Pontiac GMC in Belmont.

Poulin Auto Country in Rochester also confirmed that GM sent it a notice but said the decision wasn't final, owner Ron Poulin said last night.

On Thursday, Poulin -- who sells Chevrolet, Chrysler and Jeep -- received a "thumb's up" from Chrysler saying it would keep receiving Chrysler vehicles.

But on Friday, Poulin heard from General Motors saying its franchise agreement would be terminated next year -- a "huge rollercoaster" for the family-run business, he said.

Poulin, who's received strong community support for keeping its GM ties, said he will appeal the GM decision and plans to remain open even if the final decision goes against him.

"What's critical here is it's not Poulin Auto Country that is going away," Poulin said.

McNamara estimates about 20 Granite State dealerships -- down from his previous estimate of 25 -- could be shuttered or deeply affected by auto manufacturers axing showrooms.

That would involve six Chrysler dealers, eight GM dealers (through two rounds of cuts) and six others if Saturn, Hummer and Saab don't find new buyers.

At Cupples Car Co. in Laconia, owner Ross Cupples said used-car sales are becoming a bigger chunk of revenues for dealerships that also sell new cars.

"New-car sales are down, so it seems you see new-car dealers at used-car auctions with a fervor," Cupples said. "I definitely see an influx of new-car dealers at auction bidding against each other."

At Route 101A Auto Sales in Amherst, owner Gerald Scannell doesn't think the competition will increase greatly if a handful of dealers shift exclusively to selling used cars. He sells 20 to 30 cars a month for between $4,000 and $10,000 each, and his sales are up 25 to 30 percent over the past year, he said.

And, he added, new-car dealers have been expanding their used-car inventory to include high-mileage vehicles, including cars with 70,000-90,000 miles.

Also working against used-car dealers, many say, is customers' difficulty in securing a loan.

"It's harder to get people financed. Even with a higher credit score, they're looking more at their debt-to-income ratio," Bradley said.

At Wally's Auto World in Plaistow, manager Lisa Fernandes said she's not worried about increased competition.

"We're not afraid one bit," she said. "I think the used-car market is the market to be in."

At Auto Wholesalers in Hooksett, sales manager Kevin Lajoie said 80 percent of his business is from repeat customers or referrals.

"I'm sure that's going to affect everybody," Lajoie said of new-car dealerships' transition to used cars. "You have a lot of used-car dealers that have gone under themselves in the last 12 months."