Mecum challenger crazy!

[JH27N0B]

I don't think the auction houses ever bid something up after it hits reserve.  Their game is to bid the number up to just short of reserve so that the real bidder out there in the audience who wants the car and is willing to pay the price will make another bid. That bid will hit the reserve and then, regardless as to if the bidding continues or stalls out, the car is sold, and the auction house gets its buyers and sellers premium.
The auction house's goal is to sell cars and collect premiums.  Squeezing the last possible nickel and dime out of the sales price isn't the goal.  If the car hits reserve and sells, they are happy!  Keep in mind Mecum charges a buyers premium of 8% and a sellers premium of 8%.  A car sells for 50 grand, then Mecum is pocketing 8 grand plus the listing fee the seller paid to put the car in the auction.. If it doesn't sell, they only get their $500-$1500 listing fee. Why would they risk messing up the goose that is laying golden eggs for them by trying to shill the bidding up any higher?  If they did and the car ended up selling for say 60 grand instead, they get another 1600 bucks.  If their shilling was to backfire on them, they have at best cost themselves 8 grand, and at worse, might be on the hook to buy the car for the selling price minus the 8% sellers premium.
Whether their shill bidding is ethical or not is debatable.  It can serve the seller, if I am selling a car and my reserve is 50 grand, and there is only one bidder out there who likes the car and is willing to pay 50 grand for it, shilling by the auction house is the key that could make the deal happen.  Otherwise the bidding would stall out well short of 50 grand, the reserve wasn't met and the car doesn't get sold.  The seller carts his car home disappointed and the would be buyer goes home empty handed.  Mecum does have a "the bid goes on" feature at the auction where after a car runs, if it doesn't meet reserve, potential buyers can go up to the bid goes on booth and make offers.  So maybe a sale would still be made, but more likely not.
On the other hand, lets say I set the reserve at 50K, but I am thinking if the bidding isn't too spirited, I may drop the reserve if the bidding hits 40K.  There is a bidder willing to pay 40K, but that is the max he can go as that's his credit line or his wife said she'd divorce him if he spent over what they agreed was his allowance before the auction.  The auction house shills the car up to 45K, the car doesn't get sold, and both the seller and potential buyer are disappointed.  In that case the shill game screwed everyone involved.

[roadman5312]

            Interesting note. I was told by a Classic Car dealer here in Orlando that if your car doesn't sell, you take it home and sell it within 6 weeks, you have to pay Mecum the commissions. Said that is why he doesn't consign cars with them.   

                                                                                       

[67vertman]

I have been to, and driven cars across the auction block, for a couple of Mecum auctions. When you are on stage when there is no real bidders in the audience you can tell. The auctioneer is point out to the audience but no one is raising the paddle, or there aren't any Mecum people talking to a bidder. 

I have also seen where there is only one "real" bidder, but the auctioneer still raises the price trying to coax another bid.

Also, when they say the "Bid Goes On" you can always still negotiate a deal on the car after it is off the block (through Mecum).

I have seen Frank Mecum work a seller to lower the reserve if the price is close to the reserve, and they often offer the seller a reduced commission fee or to wave the listing fee.  The listing fee differs on when you car goes across the block as well.  So a Thursday fee early in the day is lower than a prime time Friday or Saturday night fee.

One of the craziest deals I saw was a 1956 Belair 210 post car, this car was freshly completed and the owner told me he had over $400,000 into the build.  The cars was immaculate and well put together.  When I asked the owner what he wanted for the car he said north of $120,000.  As I drove it across the stage, it stalled out out $72,000, I thought for sure that it wouldn't sell, then I heard them announce that the reserve was off....it got four more bids and sold for $76,000. I never did get to talk to the owner again to see if he was happy with the results....

[roadman5312]

          Wow, $400,000.00 build sells for $76,000.00  Why would someone do that. Oh well, thats life. My buddy has a 57 Bel Air,
80K build, was offered 110K at a car show cash from a brief case. He shook his head no, said I built it for me. 

                                                                                   

[HP_Cuda]

Wow shill bidding is alive and well.

Remember those 2 latin words: Caveat Emptor!