Save Your Allowance

[Blake Foster]

[QUOTE=GregWeld;571803] When you're the buyer at the BJ (or any other) auction --- that means you paid the very top price for that car at that time... otherwise you wouldn't be the buyer. Nobody else in the room - or on the phone - was willing to pay more.

Agree and have always said this. I was at an equipment auction on time and old used welders were going for near NEW price.

As to selling out all at once, I would think spreading them out would make more sense, But what the hell do I know. maybe there is a legitimate reason and maybe he HAS to sell them????

[BMR Sales]

Originally Posted by GregWeld

Really? He bought at the top.... When you're the buyer at the BJ (or any other) auction --- that means you paid the very top price for that car at that time... otherwise you wouldn't be the buyer. Nobody else in the room - or on the phone - was willing to pay more.

He hasn't bought much (and I'm usually there sitting about 5 chairs away from him) during the recession. He bought a TON of cars in the 3 and 4 years when cars where at their absolute peak and he paid peak prices.

Now -- Like real estate -- you also have a buyers premium paid -- now you have to add entry fees and selling fees to recoup.

and many of his "Buys" were B-J Charity Cars that go for Well-Beyond Crazy Prices

[Yelcamino]

In case anyone is interested in the story...

Ron Pratte To Auction Off Car Collection At Barrett-Jackson Scottsdale

[next69]

I agree with the group, I think this will saturate the market with too many high end cars for the market to support, my guess is he will lose some money and there will be a few lucky guys that add a car or two to their collection that may have been just out of their reach prior to this upcoming opportunity.

Definitely seems like an odd approach for a guy worth that kind of money, my guess is with him being a construction guy and things improving in that area he is probably looking for some losses to offset an increased income.

Regardless, I can imagine walking into his shop today as myself or after the auction as him.

[BBBluey]

I love watching car auctions.
I saw the one where Mr Pratte bought a charity car and then put it back in for auction. I think it was for the Wounded warriors, guy gets my salute

Surprises me that he wouldn't sell/unload a large portion of his collection to buddies.

Anybody know where I can find a list of his collection? The docket isn't loaded in the B J site. Would really like to know if he owns a 60's Pontiac Banshee.

[Sieg]

Sadly it might be due to a medical condition.

[intocarss]

Originally Posted by Sieg

Sadly it might be due to a medical condition.

Hope not. Says here

According to multiple sources, Pratte’s decision to sell is simply a case of buying everything he’s ever wanted. Having accomplished that goal, he’s ready to do something new.

[Flash68]

Originally Posted by bret

I've got a Boss 429 that is in nice "driver" condition...do I take it there in January in hopes of piggybacking the celebrity of hte Pratt collection...do I hold off thinking I would get lost in the crowd...

If it were my car I would certainly wait for the next one, Bret. The Pratte liquidation sale, on top of the usual cars there, sounds like a buying opportunity (WELL BOUGHT!) to me compared to a typical year.

To counter that, would his liquidation bring out a ton of buyers who aren't already there or in the market for his type/quality of cars? I wouldn't think enough to offset.

And for a guy who just wants to move on to another chapter he doesn't have to spread out the sale of the cars. It's not about the money to him at this point I would think.

It sure is an interesting discussion!

[MarkM66]

I'm sure he's selling them all at once our of convenience. What's money lost on cars at this point?

[GregWeld]

Originally Posted by MarkM66

I'm sure he's selling them all at once our of convenience. What's money lost on cars at this point?

He's been a collector for a number of years. These are also in his "museum"... He's also a very smart guy - and has, no doubt - smart people advising him.

If you look at "investments" as a whole --- in other words - you have 40 million at cost -- and you sell for 50 million. The individual "investment" is not important. I'm sure he's going to sell some at below cost and others at above cost. Overall if he breaks even... he'd probably be happy.

Now --- Let's discuss a "rich peoples problem". LOL


The IRS tax code only allows you to deduct a charitable "donation" when you have paid MORE THAN the item is "worth" (fair market value). So if you pay 90 grand for a 100 grand car --- there IS NO DEDUCTION. If you pay 700 grand for a car worth 100 grand -- you get a 600 grand deduction. If you then turn around and donate that 700 grand purchase to be resold -- you get another 700 grand deduction....

Now -- if you're in the top bracket -- and you're also in the "alternative minimum tax" bracket... that deduction becomes quite valuable and doesn't cost you anywhere near "out of pocket" to what you just "spent".

That transaction just became a 1.3 million dollar charitable deduction. At 40% tax bracket - that became a $520,000 tax savings. Still a large out of pocket expense -- but it's a 160,000 out of pocket expense not a million three...

People that have large incomes and large net worths - discuss these types of transactions well before they're actually made. People "PLAN" what they need, or want to, "donate" a year in advance. How they donate isn't as important as the dollar amount per tax year. Personally - I know EXACTLY what I'm going to donate and how. When we go to a charity auction - we never bid on anything - we only do a paddle raise bid which is just pure "cash" donated to the charity of choice. That way we never get into an argument with the IRS about the "fair market value" of an item. They usually win that discussion. Unless you are able to PROVE that the item you just bought and then returned is worth what you say it is. Hard to dispute you just paid 100 grand for it and someone else just bought it for 100 grand... (bought the item and then donated it back and it's sold again). That's why those are done that way. End of story. Charitable no doubt -- and worthy of praise and admiration.... Just understand that they know what they're doing.


So here's where I'm going with this ---- not every car in his collection is a 5 million dollar Cobra... so maybe the thinking is that the BIG MONEY cars will draw in the crowd (bidders) for the "lesser" cars in the collection and OVERALL things will work out for the seller. Just a thought. Either way - it's going to be really fun to watch unfold. When you have a net worth measured in hundreds of millions -- 10 million one way or the other doesn't affect where you're going to eat lunch.