Car auctions have their own vocabulary, and three terms decide most of the money: the buyer's premium, the reserve, and no reserve. Each one changes what a bidder will offer and what the seller is paid.
Here is what they mean, with real fee schedules as examples.
Key numbers
- Buyer's premium
- A fee the winning bidder pays the auction on top of the bid. For cars it runs from about 5% to 12%.
- Hammer price
- The winning bid, before any fees are added or taken off.
- Reserve
- The lowest price the seller will accept. It's kept confidential.
- No reserve
- The car sells to the highest bidder, whatever the bid.
Why the buyer's premium matters to the seller
The buyer pays the premium, not you. But bidders think in totals. Someone with $110,000 to spend will stop near $100,000 at a 10% auction, and near $104,750 at an auction that charges 5%. A higher premium tends to mean lower bids, because it comes out of the same budget.
It also changes how you read past results. According to Classic.com, the sale prices published by Barrett-Jackson, RM Sotheby's, Gooding and Broad Arrow include the buyer's premium, while Mecum, Bring a Trailer and Cars & Bids report the bid alone. When you research what your car might bring, check which number you're looking at.
Hammer price and what you're paid
The hammer price is the winning bid. Two different sums are then worked out from it:
- The buyer pays the hammer price plus the buyer's premium, plus any taxes and fees.
- The seller receives the hammer price minus the seller's commission and any entry, listing or marketing fee.
Here is a $100,000 hammer price at Mecum for a car sold with a reserve, using the fees reported by Motorious:
| Amount | |
|---|---|
| Buyer pays, bidding in person (hammer plus 10%) | $110,000 |
| Seller's commission (10%) | $10,000 |
| Seller's entry fee | $350 to $1,000 |
| Seller receives | $89,000 to $89,650 |
| Auction company keeps | $20,350 to $21,000 |
On the online sites the gap is far smaller, because sellers pay little or nothing. On Cars & Bids the seller would receive the full $100,000 and the buyer would pay $105,000.
What is a reserve price?
A reserve is the lowest price the seller will accept. If the bidding doesn't reach it, the car doesn't sell. The figure is agreed between you and the auction before the sale, and bidders aren't told what it is.
A few things about reserves surprise first-time sellers:
- The auction has a say. Cars & Bids says it may ask for a lower reserve than you suggest before accepting a car. Gooding Christie's terms say a reserve won't exceed the low presale estimate.
- The auctioneer may bid for you. Gooding Christie's terms allow it to place bids on the seller's behalf up to the reserve, though not at or above it. So a bid below the reserve isn't always from another buyer.
- A reserve can cost more. Mecum is reported to charge sellers 10% with a reserve and 6% without.
- A no-sale isn't free. You've still paid the entry or listing fee, and at a live auction you've paid to transport the car there and back.
If the reserve isn't met online, the site usually tries to keep the deal alive. Cars & Bids says it contacts you and the highest bidder to help make a deal.
What does no reserve mean?
No reserve means there's no minimum. The car sells to the highest bidder, whatever the bid. Some auctions call it an absolute auction.
Auction companies like no-reserve cars, because every one of them sells. Barrett-Jackson says no reserve attracts serious bidders and typically leads to higher bids. Cars & Bids says its no-reserve auctions get more bids and more attention. Mecum is reported to take a lower commission and halve the entry fee.
The risk is all yours. On a quiet day, or with a car that only a few people want, the high bid can land well short of what the car is worth, and you have to take it. On a six-figure car that can be a five-figure loss.
Reserve or no reserve: how to decide
- If you owe money on the car, or there's a number you can't go below, set a reserve.
- No reserve makes most sense when demand is deep: plenty of recent sales of cars like yours, each with many bidders.
- Set the reserve from recent sale prices, not from asking prices.
- Ask what a no-sale costs you, and what happens next if the reserve isn't met.
- Compare the saving. On a $150,000 car, Mecum's reported 4-point gap between reserve and no reserve is $6,000.
Selling with a loan on the car? How selling works explains the payoff.
Other auction terms worth knowing
- Seller's commission. The auction's cut of the sale, taken from the seller. RM Sotheby's describes it as a percentage of the sale proceeds.
- Entry, listing or marketing fee. A flat fee the seller pays to put the car in the sale. It's usually owed whether or not the car sells.
- Estimate. The price range a catalog house expects a car to bring, printed in the catalog.
- Lot. One item in the sale. Your car gets a lot number, which sets when it crosses the block.
- Proxy or absentee bid. A maximum bid placed in advance. The system, or a member of staff, bids for the buyer up to that limit.
- Bidder registration. What a buyer pays to get a bidder number at a live auction. For Barrett-Jackson's 2027 Scottsdale sale it's $100 to $550, and it isn't refundable.
- As-is, where-is. The buyer takes the car in its present condition, with no warranty from the auction.
Ready to compare venues? Selling a car at auction sets the fees side by side.
Common questions
What is a buyer's premium at an auction?
A fee the winning bidder pays the auction company on top of the winning bid. At car auctions it runs from about 5% on online sites to 10% or 12% at live auctions.
Who pays the buyer's premium?
The winning bidder. The seller doesn't pay it, but bidders allow for it when they decide how high to go, so it still affects the price.
What does no reserve mean at an auction?
There is no minimum price. The car sells to the highest bidder, whatever the final bid is.
What is a reserve price at an auction?
The lowest price the seller will accept. If bidding doesn't reach it, the car doesn't sell. The amount is kept confidential.
Does the price in auction results include the buyer's premium?
It depends on the auction. According to Classic.com, results from Barrett-Jackson, RM Sotheby's, Gooding and Broad Arrow include it, while Mecum, Bring a Trailer and Cars & Bids show the bid alone.
Is no reserve better for the seller?
It can bring more bidders and, at some auctions, lower fees. But you must accept the final bid, however low. Set a reserve if there's a price you can't go below.
Sources
- RM Sotheby's: Questions about
- RM Sotheby's: The Monterey Auction 2026, bidder information
- Gooding Christie's: Terms and conditions
- Barrett-Jackson: Consignment
- Barrett-Jackson: Pro tips, how to bid at a Barrett-Jackson auction (August 24, 2022)
- Barrett-Jackson: Bidder packages, 2027 Scottsdale
- Motorious: The complete guide to auction fees and buyer's premiums (September 28, 2026)
- Classic.com: Auction fees and prices
- Cars & Bids: What's Cars & Bids?
- PCARMARKET: Buyer agreement
- Hagerty: 3 reasons to buy and sell with Hagerty Marketplace (November 1, 2024)
- Axis Auto: Bring a Trailer fees 2026 (March 23, 2026)
Figures were checked against these sources in October 2026. Prices change, so confirm before relying on them.