MONTEREY, Calif. — The 2016 classic car auctions in Monterey, Pebble Beach and Carmel - the extravaganza of highly-prized, highly-priced cars held here each August - reported sales of some $340 million.
That’s a lot of money and vehicles changing hands in the space of a week.
Beautiful cars selling for seven- and eight-figure prices pushed the sales total for the Gooding & Company to a respectable $129,789,000. The top three sellers were Ferraris: a 1959 250 GT Competizione brought $18,150,000; a 1960 250 GT short wheel base Berlinetta sold for $13.5 million., and a 1950 Ferrari 166 MM went for $5,445,000.
Bonhams, with 115 cars listed for sale at its chic Quail Lodge site in Carmel, had sales of over $33 million. Its top seller: 1931 Bugatti Type 51 Gran Prix Racer at $4.0 million.
RM-Sotheby’s reported $117.9 million in total sales with 82 percent of cars sold. Top seller this year was the 1955 Jaguar D-Type, winner of the 1956 24 Hours of Le Mans, which brought in a total of $21,780,000 - an auction record for a British automobile, RM said.
An elegant 1939 Alfa Romeo 8C 2900B Lungo Spider drew a price of $19,800,000 and made the record books as the most valuable pre-war automobile sold at auction, RM said. A Shelby Cobra CSX 2000 sold for $13,750,000, an auction benchmark for an American car, according to RM Sotheby’s.
Mecum sales in Monterey totaled $50 million and Russo and Steele reported proceeds of $10.9 million.
For many independent dealerships, August doesn’t just mean the start of school; it means a new opportunity for sales for dealerships in a college town.
Eddy Del Real, manager of Del Real Auto Sales in Lafayette, Ind., knows that nearby Purdue University is one market for the dealership.
“Usually, a lot of students I get in are looking for something under the $10,000 price and mostly imports,” Del Real said.
Del Real Auto Sales has been in business for 29 years and carries 40 to 50 units on its lot near the home of the Boilermakers.
August, as expected, is the busy time for Del Real when it comes to student customers as they are starting the new school year.
“We’ll do some school ads and advertise for first-time drivers,” he said. “We’ve (advertised) in The Exponent, which is the local college newspaper.”
Del Real Auto Sales uses traditional online advertising like Cars.com and Autotrader.com.
“But there have been cases where we’ve targeted international students in our advertising,” Del Real said. “We try to get our name into their resources within the international community. We try to get our name out there.”
As a result, the store has had a lot of people in the Asian community contact the dealership for business, Del Real said.
The biggest differences with being in a college town, he said, are targeting advertising as school starts and the buy-backs when school ends.
He said students – international students especially – often sell back cars at the end of the year making them a source of inventory.
He’s often checked Carfaxes of vehicles purchased from non-international students and many times they are cars originally purchased in Chicago or other places.
“The out-of-state students typically buy cars from where they are from and then sell them to us,” he said. “So I think they go to college with a car and then leave it here when they (go back home).”
Although Del Real Auto is a buy-here, pay-here dealership, that doesn’t come into play much with college students.
Most of the time these are cash deals where students have already acquired their financing or saved enough cash.
“The biggest challenge for students is price points. Plus, as a buy-here, pay-here dealer, it’s difficult to do that advertising cash prices.”
The challenges of a college town don’t change, whether it’s a Big Ten town like Lafayette, or near an Atlantic Coast Conference school like Wayne Andrews, general manager/co-owner of Used Car Supermarket in Tallahassee, Fla.
The dealership, in its 42nd year, is near Florida State University and carries about 40 vehicles.
“We sell about 25 to 30 a month,” Andrews said.
Most of the sales come through credit union financing, with some secondary financing and the rare buy-here, pay-here deal.
“We actually have three colleges nearby,” Andrews said. “We have Florida State, Florida A&M University and Tallahassee Community College, which is huge.”
The community college alone has about 12,000
students, he said.
“The community college is made up of local kids, so a lot of their parents have bought from us – actually some of their grandparents, too – over the years,” Andrews said. “So we’ve kept an open line of communication over the years.”
The dealership’s proximity to colleges influences its inventory mix.
“We try to keep a good selection of small gas-sippers and stuff that’s not overly expensive,” Andrews said. “You know, the parents of most college kids want them to be in something that’s inexpensive and safe, but also gets good gas mileage.”
The company targets students in different ways.
“We change up our marketing a little bit when the kids come back to school,” Andrews said. “We try to appeal to things they might like and that their parents might like.
“We keep a selection of cash cars, for those parents who might want to spend $5,000 on a car to get their kid through school.”
While the dealership may carry a few of those cars seasonally, such as during tax time, they will boost that amount during the back to school period in August.
Andrews said the key is product placement.
“We look to (place an advertisement) in a publication that you know is going to reach the kids and is going to get their attention,” he said.
That could include a school publication “if there’s a deal out there to be had,” he said.
Andrews said there is a local shopper guide that he uses to advertise and may enhance that by getting a full front page or back page to draw attention.
Dealers in college towns have to keep in mind one of the challenges that comes from being near a college or university.
“You know, the students bring your median income down,” Andrews said. “So if you have a lender that comes in and wants to see every person with a $2,400 a month income or better, we know we’ve got 70,000 to 80,000 students here, which is almost a third of our county’s population. So that gets figured in.
“We have to beg our lenders to flex a little. Most of our kids are working part-time, so if they don’t have a parent to co-sign or buy for them, (it’s difficult).”
Andrews said his dealership has one feature that brings parents some peace of mind.
“One big thing that I’ve found over the years is that parents really appreciate the fact we have a full-scale service department,” he said. “I could take a parent’s credit card over the phone to help pay for their kid’s repair if they’re out of state.”
Andrews, as a father, can relate to that situation.
“My kids went to FSU, so I understand the trials and tribulations of having kids in college,” he said.
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