Hidden costs in auctions.

[JayAg47]

So I've never participated in any auctions (except on ebay), I'm trying to dip my toes in the upcoming SARC auction, so I'm looking at a coin at around 200 dollars, if it hammers for say $300, the website states a 9.25% California sales tax, with 20% buyers premiums, which adds another $90, furthermore the shipping is between $40 to $50, at the end the expected cost of the coin would be around $450. Can anyone help me if I'm thinking right? 

Thank you

Edited January 17, 2023 by JayAg47

[filolif]

I don't think you're paying that California sales tax unless you're in California. I didn't want to assume just in case you aren't.

[John Conduitt]

You might not pay the California sales tax, but you might have to pay a sales tax depending where you are. (Plus any customs charges if you're not in the same country). On top of that, you might get charged an admin fee by whatever carrier is used, if any further taxes are collected by them. That isn't peculiar to auctions, though. Neither is the shipping - $40-50 looks a lot, depending on the value of the shipment.

The only cost unique to auctions is the buyer's premium. 20% is quite low these days. On very low value coins, you might find there's a minimum fee, e.g. a $20 coin might come with a $7 fee, not $4. The tax might also be applied differently to the premium and the coin i.e. coins can have a different tax rate, or premiums, or shipping, depending on your local tax set up.

Edited January 17, 2023 by John Conduitt

[akeady]

Here, I found something from Album from 3 years ago, where I bought a few cheap coins, which came to a hammer price of exactly $300.

I don't live in California or the US, so paid no California Sales Tax.   I don't remember if I was charged Irish VAT in this case or not, but that wouldn't be charged by SARC in any case.

I don't know where you're located - $35 was shipping to Ireland, may be less to US.   They have different shipment methods for purchases below and above $1000.

I cut off the PayPal and credit card & bank transfer information as it went on a bit.   If you pay by bank transfer, they charge $15 - in this case, that's more than the credit card/PayPal charge, but it wouldn't be for a larger purchase.   I suppose if you've got a US bank account, posting them a cheque (or check!) is the cheapest way to pay.

ATB,
Aidan.

[Limes]

1 hour ago, JayAg47 said:

So I've never participated in any auctions (except on ebay), I'm trying to dip my toes in the upcoming SARC auction, so I'm looking at a coin at around 200 dollars, if it hammers for say $300, the website states a 9.25% California sales tax, with 20% buyers premiums, which adds another $90, furthermore the shipping is between $40 to $50, at the end the expected cost of the coin would be around $450. Can anyone help me if I'm thinking right? 

Thank you

Think you're about right. As a rule of thumb, I add 1/3 of the Hammer price to calculate what I need to pay, which is a minimum.

The final sum depends on various factors, such as where you live (taxes, shipping costs) and how you pay. i always check the buyers premium and shipping. Some auctioneers almost charge 30%, and I try to avoid them, Unless I really want the coin, then I use it to determine my max bid.

I once almost needed to pay additional costs of 100% of the hammer price. Yes, Im looking at you Heritage USA! (Hammer was 95, total costs 180!) Its those annoying handling costs, that are not mentioned, or hidden, in the terms of sale. Be careful. 

[John Conduitt]

1 hour ago, akeady said:

 If you pay by bank transfer, they charge $15 - in this case, that's more than the credit card/PayPal charge, but it wouldn't be for a larger purchase.   I suppose if you've got a US bank account, posting them a cheque (or check!) is the cheapest way to pay.

I have never been charged a bank transfer fee by any auction house, even if they said they charge it. I think this is in the case where you don't use a service that includes all fees, and they get charged. In any case, if you use Wise to pay, it says 'this is the amount the recipient will get'. I just make sure that's the invoice amount.

Edited January 17, 2023 by John Conduitt

[JayAg47]

Hmm, if the final price is going to cost for what I expect than I'd rather not bid on it, as the coin I'm interested only costs a little bit more at retail lol. Maybe look into local auction houses for a start, avoids any surprise taxes and exorbitant shipping! 

[John Conduitt]

13 minutes ago, JayAg47 said:

Hmm, if the final price is going to cost for what I expect than I'd rather not bid on it, as the coin I'm interested only costs a little bit more at retail lol. Maybe look into local auction houses for a start, avoids any surprise taxes and exorbitant shipping! 

This happens a lot. You need to keep an eye on the total and not get carried away 🤣 I have a spreadsheet that works out the total cost of my bids at an auction including shipping, so that I know where the limit needs to be, especially if I do/don't win other lots that change the shipping cost per coin or push me into a new insurance bracket. ($40 shipping isn't a problem if you have 40 coins).

A few dollars either way shouldn't matter too much, but it can e.g. Roma have a £2,500 limit for paying by credit card - so go over that, including fees and shipping, the latter not being calculated until afterwards, you need cash! But usually, I use auctions for coins that don't come up often retail.

Edited January 17, 2023 by John Conduitt

[quant.geek]

I purchased a lot of coins from SARC over the years and I live in the US, but not in California.  No sales tax, shipping was reasonable, and if you pay using wise, you just pay the hammer price + commission + shipping + a very reasonable wise transfer rate. The transfer rate is even free if you use Zelle, which is what I do...