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Tough Times In The Collectible Car Market

The times they are a’changin. Just three months ago at one of the auctions associated with the 58th annual Pebble Beach Concours d’Elegance, records were set. Not only was the $64.2 million dollar take the largest tally ever for that type of car auction, but one lucky bidder paid the highest price ever for an automobile: $7.92 million dollars for a 1937 Bugatti Type 37SC Atalante Coupe. However, that was three months ago, and like I said, the times they are a’changin.

That record setting auction may have been the high point in the automotive collectors market, at least for now. With the economy weakening to the point where even the fabulously wealthy are starting question their luxury purchases, many high-end antique cars are suddenly being unloaded onto the market. That increase in the number of classics available, plus the lack of big money around to bid on them, means prices are dropping.

Graph courtesy of the WSJ

According to the Wall Street Journal, the high-end Ferrari market has fallen 20% to 30%, and many owners are trying to unload their cars and get cash as quickly as possible. A dramatic example of that: at a recent weekend of auto auctions and racing events in California, there were four Ferrari Daytona Spyders for sale (there were only 122 ever made), of which one didn’t even make it past the reserve price.

It seems these economic times are hitting everyone hard. Collectors are having a difficult time maintaining their collections, and with the credit markets drying up, would-be collectors can’t even get started. Many of the smaller collectors, people who buy one or two cars worth less than $100k, used home-equity loans or other credit to buy their dream cars, and they’re being forced to sell off those dream cars just to stay afloat. That’s why the less expensive classics are the hardest hit by the economic crisis. Some cars, like ’57 Chevys, 1960s GTOs, and early Corvettes are selling for half what they were worth 2 years ago.

But like fluctuations in any type of market, this could be a very good thing for some smart buyers. There are ultra-rare antiques on the market right now, cars that would have been impossible to buy at any price, available since their owners are forced to sell; and they’re selling for relatively low prices. So for those who have the money and the will, this may be the opportunity of a lifetime.

(via The Wall Street Journal)

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9 Responses

  1. The Wall Street Journal might be a good source for many things, but not for the market on collector cars. The idea that 1957 Chevrolets, mid-Sixties Pontiac GTOs and early Corvettes are selling for half what they were worth two years ago is not true.

    Barrett-Jackson held an auction in Las Vegas, Nevada on October 16-18. At that auction a 1956 Chevrolet BelAir hardtop, in excellent condition and sporting only 1,679 original miles, sold for $63,800 (including a 10 percent buyer’s fee); a 1967 Chevrolet Corvette convertible, in excellent condition and equipped with a 435 hp, 427 cubic-inch V8, sold for $165,000 (including same buyer’s fee); and a 1966 Pontiac GTO two door hardtop, sporting just 85,307 original miles and equipped with “tri-power carburetion (triple, two barrel carbs), sold for $49,500 (including buyer’s fee).

    While the GTO was a bit soft, the BelAir and Corvette held steady to past values (Source: the December issue of Sports Car Market magazine).

    The cars everyone agrees will come down – a bit – are the MoPar “muscle cars.” However, at a small – less than a 100 cars – auction in Bellevue, Washington, held on November first by Silver Auctions, a 1970 Plymouth ‘cuda coupe, in excellent condition and equipped with a 383 cubic-inch V8, sold for $47,500 (plus an 8 percent buyer’s fee).

    There is no inflation anymore; and so collector cars aren’t selling well as a hedge against inflation. They are selling well because people with money still have it and are willing to spend it.

    The real test of the market for collector cars will be the several auctions, held in the desert around Scottsdale, Arizona in January of the new year. Thing is, those auctions are really international affairs, and so it will be a test of the market not just in the States, but worldwide.

    I don’t know about you, but my crystal ball is fogging up.

  2. DJ Houston says:

    I’m a retired judge who handles mediation & arbitration in several states. The collector car market is in a tailspin. It is supply and demand. I have clients who can’t liquidate their $30,000 and under cars even when they drop the price more than half because there are NO BUYERS! This Depression will last 4-8 years. Wall Street is afraid and hates Obama so they’ve moved the Market’s cash and assets out of the US for the regime’s duration. The money people are buying Euros and hand’s on Gold, not old cars that depreciate as soon as they’re sold. My clients get back 25-33% of every dollar they’ve spent on collector cars sold in the last 6 months. Deflation and higher food costs are around the corner. In a years time you won’t be able to give old cars away. I’m seeing it now

  3. Two vintage BMW Isettas sold for $44,000 each, at two different auctions, held in Arizona in January.

    On February 6-8, RM Collector Cars held an auction in Ft., Lauderdale that had total sales of $11 million (USD).

    The Bonhams’ Retromobile auction, also held in early February, over in Paris, France, saw an unrestored Bugatti Type 57S Atalante coupe – a true barn find – sell for an astounding $4.4 million. A 1911 Pratt-Elkhart roadster, one of five American cars at that same auction, sold for $59,340.

    Are collectible cars that were once bought by retired contractors who wanted a 1967 Plymouth Road-Runner down in value? Yes, they are – especially “muscle cars,” that have no documentation and were “clones” or “replicas” or “tribute cars.”

    Silver Auctions, long known as the collector car auction company for the working man (or woman), took in $3.2 million less at its January/Arizona auction, than it did in 2008; and sold just 45 percent of the offerings. But there was a notable exception to the rule: a 1973 Plymouth Scamp, originally equipped with a Slant-Six, that sold for $19,440 (including 8 percent buyer’s fee), thanks to a 340 cubic-inch engine, topped by Six-Pak carburetion (three, two barrel carbs) and a particularly well done restoration.

    Collector cars with providence are going to hold up, for the same reasons that people with money are buying gold or Euros.

    So let’s stop using this forum to bash President Obama. What was the alternative? Does anyone really feel that a President McCain would have been able to stem the financial carnage now taking place? Would a vice president Palin have been able to fly to Wall Street, or the pits of the Chicago Mercantile and assuaged fears there, to such an extent, that everything would be as it was? It’s highly doubtful.

    If retired judges in Florida want to blame a president, they might want to look at the president who insisted on conducting an unnecessary war in Iraq, while providing no methodology of paying for it. Or look at Frankin Raines, who along with that same president, decided to give a mortgage to anyone with a steady job, making $20,000 a year.

    But that’s just my opinion, with some facts up front to support it. I do tire of overly simplistic nonsense that wants to blame a president who hasn’t even been in office for 90 days.

  4. Gabi says:

    i agree with number 2 and 3

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