Why wouldn’t the classic car market crash? Not only are the bonus boys getting bounced, but swanning around in multi-million dollar cars is just not done in these turbulent times. And even if it is, the temper of the times still calls for restraint re: purchasing four-wheeled frippery without which even the wealthiest amongst us can survive. The weird thing here is how long it’s taking the MSM and even the specialist press to acknowledge and declare the collapse of the collector-car market. It’s almost as if they’re in cahoots with the people promoting and selling the vehicles, along the lines of those real estate magazines whose articles are as thin as the “there’s never been a better time to buy” logic contained within. Reality checking is a tough job, but someone’s got to do it . . .
A perfect example of the black hole swallowing the biz: the results of the Paris Rétromobile 2009 auction. The over-riding, indeed inescapable trend: cars aren’t even making their reserve. In other words, they’re not selling.
Classic Driver provides the auction results, as a link from Steve Wakefield’s usual livin’ in the sunlight, lovin’ in the moonlight, havin’ a wonderful time report. Thirty-four out of fifty-four vehicles listed were “not sold.” As to whether the cars that did sell made the same money they would have pre-crash, I leave that to those members of the Best and Brightest, whose financially uncompensated efforts in the pursuit of the truth are most appreciated.
If you interpret this collector crater to mean “there’s never been a better time to buy,” I’d like to remind you of my own experience. The asking price for the remaining 2008 Lexus IS-Fs I’m eyeballing have descended by roughly $4k a month. It may not be exactly analagous, but imagine the depreciation on a Ferrari 259 GT Coupé Ellena. If you’re the owner, you might want a stiff brandy before attempting that particular intellectual exercise.
In January, The Barrett-Jackson auction in Scottsdale Arizona, was selling classics, collectors, and antiques at market correct prices. GM was selling off selected vehicles from its private collection. I watched it 2 days, and for most of that time everything sold and met reserve.
There is no doubt it had some impact as it seemed that the no reserve cars were down slightly but still within reason. The auction seems set market values for the year as price points are defined by those sales. I wonder where it will be next year or better yet, how will pricing trend as the year progresses.
I myself have several collector vehicles and even as of this past Monday was being bugged to sell one of them by an acquaintance. Should I let go of one of mine, I just can’t do it but, as Bob Barker or now, Drew Carey says, The Price is Right!
Europe is probably doing worse than the US because Europe is financially in even worse shape than the US, to be honest. Spain, the UK, Romania (which had some good growth going for awhile) – pretty well have collapsed, with Germany down and also France and other countries.
To correct snafu….BJ auctions are famously (or infamously, depending on one’s point of view) all no-reserve auctions. All cars get sold, whether sellers like the gaveled price or not.
There were sure a few tense moments at this year’s BJ Phoenix auction. The look of panic Reggie Jackson’s (and Craig Jackson’s) face when his green ’69 Camaro ZL1 stalled out way below what they were expecting was priceless and summed up the tone of the whole auction. I bet Craig Jackson and his auctioneers haven’t been getting a lot of sleep these days.
I would agree that in the overheated collector car market bubble that inflated over the last several years, auctions like BJ probably did set the overall pricing trends in the markets, if not absolute prices for certain cars. But now that the bubble’s burst and the market is essentially in free fall, I think BJ and its clones are mere harbingers of what’s going on in the collector car world and can only reflect in prices paid (or reserves not met) the dearth of buyers out there.
In other words, for sellers out there its every man for himself.
Barrett-Jackson is an all no reserve auction so everything has to sell.
The guys on Speed did a pretty good job in identifing “well bought” without saying “isn’t that the owner slashing his wrists over there?”
Accross the board prices were down. It seemed especially at the lower end of the market. The “I ain’t got more money than brains” buyers were obvously hurt by the economy more than the better healed buyers. Cars under $100k like most GTO and Chevelles were probably off more than 20% compared to a year ago.
Traditionally collector cars have lagged the financial markets in terms of price curves. This is because the objects themselves are both tangible, and increase in value usually better than stocks.
The footnote to these facts are that this ONLY applies to “premium” collector cars. By this I mean top-flight machines such as Bugattis, Duesenbergs, Mercedes-Benz 540Ks and 300SLs, any pre-1971 Ferrari, and select other models of other marques with bona-fide provenance or actual wins at Le Mans, Sebring, etc (like C- & D-type Jaguars, Porsche 550s, Cunningham C4 &C5s, Alfa Romeo 6C, 8C, TZ, & SZ models, ACTUAL documented Shelbys, etc.)
This does NOT apply to any mass-produced, “limited edition”, “special optioned”, reproductions, resto-modded, “tribute”, “continuation”, celebrity ownership, or any car with suspect provenance. These cars value rises only as the top-end market rises, but falls much further, much faster, and more in lock-step with the financial markets.
People who blew six-figures on “special optioned” or “resto-modded” Muscle cars at B-J a few years back were basically buying sock-puppet dot-com stock at the peak of its value. In other word, they were fools whose money was soon parted from them.
I’d still not hesitate to put my money into a 300sl, a 250gtb/4, Duesenberg SJ, or a D-type Jaguar… if I had the money to do so. These cars will continue to appreciate forevermore at a rate far higher than any other investment ever could. Not so your ’67 Camaro, or even my ’65 E-type. Those cars were just too common, and still too available to appreciate at double- or triple-digit rates.
If you want to follow this market closely the trade to read is Sports Car Market, whose publisher was unceremoniously banned from B-J after speaking the truth about the insane valuations going on there a while back.
–chuck
The Barrett-Jackson auction is an auction, but it’s also on TV. I’d like to see what happens when the “Look Ma! I’m on TV!” factor is eliminated from the B-J.
How else can one explain the artificially buoyed Amphicar that sold for drivable Ferrari money?
A lot of great comments here about the auctions. I was at B-J this year and saw the mayor of Scottsdale get up and say, “After sitting here watching this auction, it’s clear the recession hasn’t come to Scottsdale.” A woman sitting behind me murmured, “Either he’s lying or he doesn’t know a thing about cars.”
Obviously some of the overinflated prices of previous years were not being matched in the auctions this year, but there is still money out there for those “premium” cars mentioned by Chuck. How else to explain the Gooding & Co. auction getting $4.95M for a 1960 Ferrari 250 GT California Spider, a record for an unrestored Ferrari?
But no question, there must have been plenty of angry sellers this year who are now second-guessing their choice to sell their cars in the midst of a recession.
So Facel-Vega are going to be cheap ?
And to think, this morning, I had someone take me to task for my critical remarks on the Ferrari/Dino 308GT4, on the grounds that it was moving up in the world. If the high-end stuff isn’t commanding great prices in this market, a 308GT4 is not where I’d put my money…
Chuckgoolsbee is right on the mark. One of the benefits of this sorry economic situation is the sifting that is taking place between the genuine and the phony. The B-J auctions and their ilk have contributed to the hysteria that has taken a lot of interesting second and third tier cars out of the reach of the average motorhead or collector. I have seen too many ordinary folk who are interested in old cars find interesting iron just out of their reach. And I am tired of dealing with arms-folded instant “experts” with painfully inflated senses of the worth of their particular “special” vehicle. The collector car crash may be an ill wind to some but it could blow some good for a lot of others.
Totally agree, Mr. Bennett. I might add that one possible good thing to come out the collector car bubble is that many more cars probably got saved from the junk yard and restored that might not have otherwise. This should further help tip the supply/demand curve in favor of “regular Joe” gear heads who’ve been priced out the market for the last ten years. I’d love nothing better than to see the wonderful collector car hobby return to being just that, versus the big-money greed fest it’s become.