The Daily Vroom

YESTERDAY’S TOP 3 SALES

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The No Reserve Temptation

Spend enough time watching auctions and you start to notice patterns.

Over the last few weeks, I've been paying particularly close attention to no reserve listings across multiple platforms. Not one platform, not one seller, just a broad cross-section of the market. The pattern I've noticed is surprisingly consistent. A car is sitting at what feels like a very low number, bidding is relatively quiet, and then a bidder with little or no visible history suddenly appears and makes a much larger jump than you'd normally expect. Instead of moving the auction forward by a few hundred dollars, the bid jumps significantly more.

Now, that doesn't mean anything improper is happening. The bidder could be completely legitimate. They could be new to the platform, not care about bidder history, and simply want the car. The reality is that nobody outside the platform truly knows. But when you see the same pattern repeat often enough, it's difficult not to wonder about it.

Before going any further, it's worth acknowledging that the major auction platforms take this seriously. They investigate suspicious activity, review accounts, and flag bidders when concerns are raised. No platform wants buyers questioning the integrity of its marketplace because trust is ultimately the foundation that makes the entire model work.

At the same time, I understand the temptation.

Selling a car at no reserve sounds great when bidding is strong and the market is doing the work for you. It's much less enjoyable when you've spent years owning a car, improving it, maintaining it, and preparing it for sale, only to watch it sit at a number that feels miles away from reality.

Experienced sellers will tell you not to worry because the real bidding happens in the final minutes, and more often than not they're right. But human beings aren't always rational when money is involved, especially when they're staring at a screen and watching an asset they've invested heavily in sitting at what feels like a giveaway price.

I've also heard plenty of stories over the years about sellers refusing to complete transactions when no reserve auctions end lower than expected. Platforms can't force someone to hand over a title. Usually the seller gets banned, their reputation takes a hit, and everyone moves on. Again, I'm not defending it. I'm simply acknowledging that people are risk averse, and no reserve auctions require a level of trust and emotional discipline that not every seller is comfortable with.

It's also worth remembering that none of this is unique to online auctions. Auction controversies have existed for as long as auctions have existed. Last year, a Mecum sale generated widespread attention after bidding was accepted after the hammer had fallen and the vehicle had effectively been declared sold. Whether you agreed with how it was handled or not, the reaction showed how sensitive buyers are to anything that appears to compromise the integrity of the process.

That's really what this comes down to. I've watched enough auctions over the years to know that not every suspicious-looking bid is suspicious. New bidders enter the market every day, and sometimes people simply bid differently than we'd expect. But I've also watched enough auctions to know that not every bid is necessarily what it appears to be.

Personally, I don't think the question is whether this happens. Every marketplace in history has dealt with some version of the same issue. The more interesting question is whether bidders simply accept it as part of the game. Is a certain amount of attempted manipulation inevitable in any competitive marketplace? Should platforms be doing more? Would additional transparency help? Or is this simply the tradeoff we accept in exchange for the excitement and opportunity that no reserve auctions create?

Because at the end of the day, auctions only work when buyers believe the process is fair. The moment that confidence disappears, the entire model starts to break down.

I'd be interested to hear where you stand on this one.

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