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)