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Comments
Of course old junk can sink to nothingness, especially now.
The "small stuff" ($250,000 and under) does seem to be lagging a bit---not so much dropping in price as remaining unsold as owners are reluctant to take a loss, are just greedy, or more probably, have no pressing need to sell.
The "really small stuff" ($50,000 and under) does seem to be suffering, yes.
The "just an old car" category is dead in the water.
Customs are cold, too, except maybe for rods built by famous builders.
HOWEVER -- real quality cars of any stripe size or price range are still easily sold. These might include great restorations or high quality originals that are mostly or totally correct.
It's a great time to be a buyer of the $50,000 and under cars.
I think you're right . . . . . . and in a few weeks, hopefully, I'll be able to confirm that. :P
1/22
"FANS of classic cars often like to think of them as time machines. But the notion has recently taken on an unintended meaning, as prices in some sectors of the collectible-car market have turned the clock back to levels not seen since 2004-5.
All things considered, however, the market showed resilience in the string of auctions in and around Scottsdale, Ariz., this month. The long-predicted free fall in prices did not occur.
And there were some genuine surprises among the individual sales as more than $100 million worth of cars changed hands.
Perhaps the most unexpected results came at the Gooding & Company auction, which flew in the face of expectations and surrounding circumstances by a considerable measure. With $32.4 million in sales, compared with $21 million at last year’s sale, it seemed more like the summer of 2008 than the winter of 2009.
Gooding had the top-dollar sale of the final weekend with a 1960 Ferrari 250 GT California Spider, a late consignment that brought $4.95 million. And while seven-figure lots had become commonplace across Arizona over the last several years, this year there were just seven such sales and all were confined to Gooding, the last of the major auctions to get under way.
With the no-sales of some big-ticket cars at the RM Auctions sale and the still unfurling economic crisis on the minds of attendees, the mood at the beginning of the Gooding auction was tense — think back to the first 'Saturday Night Live' broadcast after 9/11.
The $1.4 million sale of a 1929 Duesenberg Model J Dual Cowl Phaeton, just nine lots in, had the same ice-breaking effect as when Lorne Michaels, the show’s producer, asked Mayor Rudolph W. Giuliani if it was all right to be funny.
Mayor Giuliani’s impeccably timed response: 'Why start now?'
David Gooding, chief executive of Gooding & Company, said there was still a strong market for good quality cars that were priced fairly and truly for sale. He did allow, however, that prices were down somewhat in the $250,000-$850,000 midrange of postwar European cars, although he sensed no similar weakness in prewar American cars in that range.
At the moment, vintage cars seem to be showing more strength in the market than other collectibles. Leigh Keno, a host of “Antiques Roadshow” on PBS, said that in general, presale estimates for American decorative arts sold at auction this season have been as much as 50 percent lower than they would have been two years ago. Mr. Keno said, 'There is a sense that the market will reward more conservative estimates.'
At RM, the star car, a 1963 Chevrolet Corvette Grand Sport — one of just five examples of a Corvette racecar whose incredible potential was cut short by General Motors’ decision to stop supporting racing — didn’t sell during the auction. Nevertheless, RM sold a very respectable 83 percent of its lots for a total of approximately $18 million.
According to Ian Kelleher, RM’s chief operating officer, the sale attracted a record number of bidder registrations for the event, and a number of cars that could be considered “sensitive” in the marketplace sold quite well. An example of the latter was a 1967 Ferrari 275 GTB/4 Berlinetta that brought $918,500. While this was a bit less than some sales before October 2008, the price was a healthy increase over the $816,750 that RM got for a similar car at a May 2007 auction in Italy.
Given the economic circumstances, there was great interest in cars priced under $100,000 that would also serve as summer weekend drivers. Cars that are easy to find parts for, and eligible for events like vintage rallies and tours, did well.
RM, for example, sold a 1967 Alfa Romeo Duetto Spider — similar to the car driven by Dustin Hoffman in “The Graduate” — for $46,200. Gooding sold a 1954 Nash Metropolitan hardtop for $19,800, Barrett-Jackson garnered an astonishing $59,400 for a 1979 Pontiac Firebird Trans Am and Russo & Steele managed $49,000 for a 1961 Triumph TR3A. All were at the least strong results, and perhaps records.
Robert Pass of St. Louis was the consigner of the 1961 Triumph. Mr. Pass has been collecting cars since the late 1950s and said he was not aware of a TR3 ever approaching $50,000 at either a public auction or in a private sale. Mr. Pass credited Russo & Steele’s arena-style format, and the enthusiasm of Drew Alcazar, the company’s owner, for pushing the car over the top.
According to Craig Jackson, chief executive of the Barrett-Jackson auction house, his company anticipated the demand for more accessible cars and purposely adjusted its offerings to favor cars in the $50,000 to $100,000 range. This was reflected in the overall sale figure of $63 million, down some $20 million from last year, but a bit higher than the company’s 2005 results of $61 million.
Mr. Jackson said that his company worked hard with consigners to ensure that there was a “meeting of the minds” where sale expectations were concerned. Nevertheless, there were notable high sales, including the second 1957 Chevrolet produced, a two-door from the entry-level 150 series with just 46,133 miles, that brought $165,000. Barrett-Jackson also continues to be the sale known for drawing new people into the hobby, with 70 percent of registered bidders being first-timers.
Shrewd Bidders Turn Up to Drive Home a Bargain (January 25, 2009)
Bids That Mattered (January 25, 2009) One of the notable aspects of the Barrett-Jackson sale was the sale of 214 cars from the General Motors Heritage Collection. Most were prototypes or concept cars and included the striking 1996 Buick Blackhawk. Built to celebrate Buick’s 100th anniversary in 2003, it recalled the granddaddy of all design studies, the striking 1938 Buick Y-Job; the Blackhawk sold for $522,500.
Nearly all the cars in the G.M. offering were sold on either a bill of sale or a scrap title, according to Barrett-Jackson. The former, Mr. Jackson said, can never be legally registered for road use. Fortunately, the Blackhawk was sold on a scrap title so it can be registered and driven on public roads. It would be a shame for it to spend its life behind a velvet rope.
Aside from the Buick Blackhawk sold by Barrett-Jackson, few concept cars were offered in Arizona. An exception was the 1954 Dodge Firearrow III sold by RM for $880,000. While some 1950s dream cars look as if they took too much styling inspiration from the Air Force’s latest interceptor, the Firearrow was exquisite in every way.
Perhaps the best buy of the G.M. collection was a 1989 Corvette ZR2, a one-of-a-kind prototype with a big-block V-8 that sold for $71,500. Tom DuPont, a Florida collector, discounted those who tried to tie the timing of the G.M. sale with the company’s dire financial condition. Mr. DuPont said he thought G.M. was simply managing its collection as many private colle
"Many of us were uncertain of things to come due to the financial market crisis. We are surprised and relieved to report that the collector car market remains strong due to the strong results in Scottsdale. The following new numbers may be misleading, and one should not draw any conclusions by Barrett-Jackson's numbers. Barrett-Jackson's total sales were Barrett-Jackson logoinherently off by $24 million compared to last year. The main reasons for their market being off a certain percentage is from fewer consignments to the auction, and the cars being offered were less expensive. Unimportant cars brought softer prices, while exceptional cars' values were right on target. So what does this mean? It means, despite the recession, people with money still love cars and are more willing to put their money into them instead of the uncertain financial market. "
While Barrett-Jackson dollar volume was down from $108m in 2007 to $84m in 2008 to just under $61m in 2009, this was, in large part, a strategic move in the declining muscle car market. Craig Jackson changed the consignment choices to match the expectations of the Speed TV auction audience, morphing from an auction to a "collector car event."
A large part of the revenue stream is a claimed 200,000 pair of feet through the door (although many were repeat-feet coming through for multiple days) at $35 to $55 per day, and about 300 vendors paying $1,500 or more each. Add in 3,000-plus bidders each paying $500, plus clothing sales, sponsorship, and miscellaneous other, and you've got a lot of tire-kicking visitors paying serious money to go to the Big Top. The action was fast and the bidding in the low-euphoria range.
FROM: Sports Car Market, article entitled "The Greatest Show On Earth"
(a bit of hyperbole there, but you get the point)
What's next. Nude dancing girls? Cars fired out of a cannon?
Hey, it works in Vegas.
(or did)
Car prices won't stabilize or appreciate until employment turns around, and of course, that is always one of the last things to improve when a recession ends.
So much of the hobby car market of the past 10-15 years or so has been fueled by inflated home equity - it's gone and there's no real reason it should return.
Things will get better...but never again like the false boom earlier this decade.
After watching the Mecum Auction today, the $195,000 paid for the Mustang Boss surprised me in relation to all the other prices other classics went for.
A decrease in the value of the dollar, which will come in time, will make prices rise -
but an inflationary rise isn't very pretty.
High end cars will hold value as the rich continue to get richer.
http://en.wikipedia.org/wiki/United_States_public_debt
It's in the history books, no creative PR allowed on that one. :P
But you guys are right, the boom in car values was fueled (in part) by borrowing on home equity, and other easy credit. I saw a lot of vintage car "leasing" as well, which were really "rent to own" schemes, not leases with a residual.
Also, lots of these old cars were (are) bargains, in the sense that 9 out of 10 times, it cost more to restore them than you could sell them for. Many people just got strung out in the restoration process.
IMO the biggest contributor to the explosion in musclecar (esp clone) prices in the past 10 years or so was home equity. So many of these cars were bought with money that was a mirage.
Now that's all washed away, so unless they had lots of savings, it's time to bail the boat.
The new economy will not do anything to help those wage trends, so there will be less competitive bidders for mass market cars.
My impression---although as only one person I am looking through a keyhole at a large universe---is that a LOT of people are bailing out of sub $30,000 cars in #3 (daily clean driver) or less condition, and that most are quite realistic, and happy to get what they can, short of distress pricing.
That '60 T-Bird with the paint chips sitting in the garage for the last 20 years is starting to look like some quick ready cash to pay off cards, fix the roof, etc.
But the very sharp, correct, restored cars? People seem to be just sitting on them, or asking 2007 prices and of course not getting it.
What would be a reasonable price for something like this? I was actually impressed that he was only asking $7200 to start...normally I'd expect to see something like this priced more like $10-12K or more, although of course there would be some wiggle room at that price! So maybe this is a sign that some people are starting to wake up to reality.
Fortunately, sanity prevailed, I guess. I just kept thinking how far that $6K could go towards getting my DeSoto roadworthy again.
Those clean drivers are the most enjoyable place to be in the hobby. You don't have to worry about un-restoring them, the cost of admission isn't too steep, and the cost of upkeep is low. A person can enter the hobby with a fine old car for under 10K. They might not appreciate a lot, but the fun you can have actually driving them makes up for it.
The very high end of the market doesn't seem to be hurting. I don't yet see a fire sale on supercharged MBs or huge brass cars, or veterans.
When you locate what is meaningful to you and can afford the negotiated price, move on it. Let not some publication influence your purchasing as the publication is not feeling what you are at the time. I have paid more than some people think I should have, but "buyers remorse" has never set in.
Let not others think for you, but think for your self in all things.
Sure they are record setting but only because Bush kept so much of his deficit spending off the books with supplemental spending bills for the Iraq/Afghan wars.
China can whine and moan but if they shut the door on us they shut the door on the massive economic growth they need to rebuild their country into the modern era. Mutually Assured Economic Destruction(MAED) replaces the old nuclear MAD theory. China needs to build something like ten new cities a year to fuel all their economic growth.
They can't rely on Europe for all of that they need the US.
Yeah, but my problem is that my tastes vary so much, and I find a lot of stuff that I like. If I miss out on one opportunity, it usually isn't long before something else comes along that I like, and if I bought everything I liked, I'd end up bankrupt, with a junkyard, or both! It's sorta like what Benny Hill once said about buses...miss one and another will come along. There aren't as many after midnight but they're faster! Or wait, maybe that was women... :shades:
Ronnie won the cold war and I had a job designing jet fighter engines that would win it if it really had to be fought.
clinton shut it all down to save me $63 a year in taxes. that came in handy while I was out of work.
Bush built it back up from shambles. 'freedom isn't free'.
question is: Will we get anything to show for Obama's plan to spend ten times what ronnie spent? Most of it borrowed.
Bush and his yellow chickenhawk (freedom isn't free...funny that those too cowardly to serve their country have no problem creating artificial wars to create windfall profits for a chosen few) cronies built nothing but false prosperity - the illusion of wealth based on unsustainable debt and falsely inflated property values. The booming economy earlier in this decade was a grand lie.
GETTING BACK TO TOPIC -- the classic car market is, that's true, tied to economic conditions in a generalized way. The classic car market seems to have shorter booms and busts than real estate or stocks, however.
This suggests to me that it is regarded not as an investment but rather as a hobby.
Very true...also, cars can be used and appreciated on a daily basis (even as they depreciate), unlike most collectables. Not much use in a Beanie Baby or a Hummel. I guess collecting firearms has some of the same attraction, but you'd better not 'use' them at home!
When Obama came in they put that money back into the regular budget making the budget look much worse then it looked before even though it really was the same.
Sure they are spending lots of money but the sliding around of money that way makes it look even worse then it actually is. It is arguably more honest but if you just look at the official budget numbers and don't think about the supplemental stuff you don't see that.
Way off topic now and I apologize.
I will say this the cars collectors I know have been holding off on purchases for a while. One guy I know had a couple of restoration in progress and is paying to finish those up, I think one is already done, but that is all he is doing for now.
You have to pick your shots. Some cars are just not worth restoring, no matter how much you like them. If an old car is cheap to buy, it's cheap for a reason.
KRUSE'S WOES
Debtors have little respect for other businessmen who let them slide. Kruse must be more agressive in collecting what others owe him so he can pay his bills. :mad:
"It's really not sold until it's paid for."
And then we have today, where "you can't bleed a turnip" rings true, especially after lawyers take their share.