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Comments
It's my impression that the prices of all but the top tier classics have weakened significantly in the past year.
"We have seen some guys pull money out of the stock market and put it into cars," said Mikus of Kustom Classics. "Cars are a lot more stable right now."
And on top of it, hot rods/customs are probably the worst way to spend your automotive dollar if you have any mind to selling it in the future. At least I could get half my money back if I restored a normal car...maybe a quarter comes back out of a custom.
There are some rods that retain value but these are the ones built by famous designers---or better yet, famous designers from the past--in other words "period hot rods" that were famous in their day in magazines and shows.
But my opinion is that if you pay someone $150,000 to build you a nice rod, you're going to get $75K--$80K for it if you put it up for sale while it is still fresh.
Why would someone pay you full price for a rod that was designed to YOUR tastes? Why wouldn't they spend the same amount of money and have it done their way?
Another factor in the hot rod world is that tastes change! Does anyone think stretch limos are cool anymore? Or Fort T buckets?
That's exactly it - when you do a custom, you built it to your tastes. You have to count on someone having both your exact tastes and the desire/money to buy the car if you want to move on. It can't happen too often. At least with a correct restoration, there is usually some group of enthusiasts to want it.
T-Buckets are so 70s, and plain rodded Model As and other 20s-30s stuff is very 80s in my eyes.
Car prices won't go anywhere as long as housing prices keep sagging and employment is stagnant or falling. I don't know if I see either changing.
Now, there were still plenty of ridiculous prices out there, as well. Oh, that 1983 or so Olds 98 I had mentioned in another forum that was $10,500, wasn't there when we got there on Saturday. So it must have sold, but at what price, who knows?
Case in point. A former client of mine wanted to get rid of his very nice Mercedes 190SL but could not get his price advertising locally (california). I hooked him up to a dealer who specializes in overseas sales and that car was on a boat to Holland in a week's time, full price paid and room for commissions, too.
So the market will reflect that 190SL prices are solid, but it won't reflect that many of them are leaving us, never to return to the US.
Which in turn, ironically, will create a certain scarcity and keep prices up yet again.
Of course, this is only for quality merchandise of the highest order.
No one is going to be shipping *every* type of old car to Europe. Only the "iconic" ones that are reasonably correct (Europeans aren't as fussy as we are about numbers, etc. as long as the car is not externally chopped up) and of excellent quality.
As usual, classic cars follow the arbitrage but I think if a car goes back to its country of origin (or near to it), it's not coming back this time around even if the dollar gets stronger.
I've seen many fintails sent back to Europe, too - as they can be bought so cheaply in the US even with shipping one can come out ahead and not deal with the rot issues. Those things will never make it back to NA.
RE: American spec cars in Europe -- they "haf their vays" of converting things to their liking, quickly and efficiently. Most well to do Europeans seem to me to be pretty facile with metric conversion to American standards and vice-versa anyway. Many speak more than one language, too.
Of course the Brits have a whole other problem with RHD/LHD, so they like to shop our RHD cars---all the quirky British stuff like Alvis, Humber, old Bentley saloons, Triumph Heralds, Stags, Vitesses, etc.---all that seems to be finding a market more in the UK than here. But they know how to swap LHD to RHD for many popular makes like Jaguar, Rolls, etc. and they can deal with rust as easily as we deal with a brake job. The same British cars we wouldn't sniff at over here are often restored in the UK, much to our (my?) amazement. But then, when you live on an island where most old cars are converted readily into iron oxide, one's concept of what is worth saving, changes.
Scandanavians are into American Muscle of all things. They go nuts for them, if they are nice and if they are "iconic" and easily recognizable. Everybody knows what a Mustang and a Corvette is. A Buick GS, not so sure that such a car goes over big in Norway.
The last Dutch used car periodical I had was full of surprising things - big old 70s GM sedans, Chrysler Cordobas, whale Thunderbirds, 70s wagons.
There's an old but still interesting article online about the Ferrari market roller coaster ride back in the 80's. "When Japan Ruled the World"
Here's a GTO that sold to Japan for $13.3 million plus commission in 1989. Five years later it sold to an American for $3.5 million:
Even at those rarified heights---it's still the supply and demand formula setting the price.
Yeah, it was in very nice condition. It was dark metallic green. Hard to tell the exact color as it was under the pavilion in the shade, but I'd say it was a bit more "forest", as opposed to "olive". I think I took a picture of it. I'll let you know when I get the pics off the camera and post them. I've been really lazy about that this year.
I think all this improved technology helps breed laziness. I remember not that long ago, the camera I used could only hold something like 150-200 pictures on one memory card, so I had to clear it off occasionally to make room for more. Well, the camera I use now holds over 1000, depending on the resolution. So, there's not as much hurry to clear 'em off.
Well we were only there for the day on Saturday, but it was still there that evening when we left. I have a feeling that it didn't sell. I'm going back up there for Hershey tomorrow, so who knows...maybe it'll be there?
Sporty 80s/90s cars like Mazda RX-7 and Toyota MR2 are still dirt, dirt cheap, and for lovers of old British stuff, the Spitfire and MG Midget give you traditional British good looks and summer fun for under $5,000 bucks.
Many of the late 70s corvettes are still unloved, and the early C4s are well under $10K for very decent performance (in the C4) and excellent handling. Build quality? Not so great.
For German car lovers, BMW 2002s are still affordable, especially the heavier-bumpered 74-76 models. Their successor, the BMW 320i, can be had almost for free these days.
I never thought I'd see the day, but the porky 71-73 Mustangs, which nobody used to like, are being pulled up to respectable numbers by the demand for the earlier Mustang models. The 71-73 Mach 1s with the smaller engines, like say a 351, could be had well under $20K for a decent one.
you can even get a decent buy on a 60s Camaro if you're willing to go for a 6 cylinder automatic, which are only purchased these days as donor cars for a big block project.
Alfa Romeos are getting very pricey, but a mid-80s Spider is still a bargain at around $6K, or a good looking Fiat 124 at $4K (except for the fuelie turbo model). The lovely GTV coupes are pushing past $20K and higher, so we won't see any bargains there anymore.
The "high end" cars, $75,000 and up, seem to be doing very well these days.
Hotrods, clones, kit Cobras, unfinished project cars---all still bargains right now.
Postwar (WW II) 4-doors are still affordable if you want a 40s or 50s car.
I have a friend who powered his 2003 with an M3 motor---that's a nice combo.
I happened to see a maroon 325i 4-door in someone's driveway tonight, that by the light of the moon and my headlights seemed in nice condition. Mine was a black 2-door with 5-speed and 126,000 miles when I sold it, but I don't mind the 4-doors. I suppose the 4-speed automatic wouldn't be bad with the torquey ETA engine, although I prefer the manual.
I'll be curious to see how prices are at the various car corrals this season. It does seem like, for the past few years, prices have become more reasonable (although that doesn't necessarily mean "reasonable"!)
Even though the stock market has been rallying of late, I don't know if that has much of a bearing on your typical middle-class car enthusiast. I remember back in October, 2007, which was when the market peaked before the "Great Recession" kicked in, there was a sort of fear in the air at the Fall Carlisle swap meet that year. You could almost smell it. Sellers were cutting prices, complaining about the economy, buyers weren't buying. And, I don't know if this is any sort of economic barometer, but there were a lot of Corvettes for sale at the show that year. Usually, you don't see that many at the Spring/Fall swap meets, because they have a show in August dedicated entirely to the Corvette.
I'd imagine that a lot of middle class/blue collar/etc enthusiasts have also been taken out of the market, over the past few years. A lot of people lost their jobs and had to raid their 401k, IRA, and other assets, at a considerable loss, just to make ends meet. Chances are, many of those people will never completely financially recover.
Checking the local real estate listings, it looks like about 3/4 of all listings in my neighborhood are short sales. And those that aren't appear to fall into two categories: 1) people who have lived in their homes a long time, well before the run-up in prices and 2) listings that probably will become short sales or foreclosures, but for the time being are priced way too high, because of the amount owed on them. So, it looks like that HELOC gravy train has left the station.
So, even though the stock markets have made some major gains, a lot of that easy money for the masses has dried up. I'm sure the high-end market, Barrett-Jackson and the like, is doing fine, still getting drunk and over-bidding on cars like they're the Great Gatsby or something. But, they're usually not the types hanging out at Carlisle and similar places.
I'm thinking about getting another car this year. The common sense side of me is telling me to get something new and fuel-efficient, like a 4-cyl Altima, Fusion, etc. But, there's another part of me that is thinking about seeing if there's something that catches my eye at Carlisle this year.
Remembering there are a few buyers (for others) with boyish smiling faces, the majority are old men with younger women paying through the nose for the car she wants as well.
Not all could be retired government employees with unlimited retirement funds, forever.
I wonder if there will be much market for a lot of these cars once the boomers are gone, especially if the economic spectrum continues to devolve.
it's not like the horse lovers or dog lovers, where each generation can renew the same adoration for the object of their desires. Lots of young people could care less about old cars---I mean, they'll point and say how neat they are and all that, but restore them, or pay $80K for one? I don't think so.
it's hard to say, but I'd guess the car hobby will devolve back to what it once was before mass media whipped it into a frenzy. You had the Model T and Model A people quietly doing their thing, you had some car museums, and you had a few wealthy people collecting historically significant cars that were hand-built works of art.
But really, cars built after the 1930 are slammed together mass produced products, and I just don't see the inheritors of these cars wanting to care for them.
So then you'll have a tremendous glut of old cars, which will drive down prices, which will dampen the motivation of the "investors", which will shrink the hobby, which will make lavish car shows untenable, etc etc.
They'll always be people who love old car, in the same way that a niche right now loves brass era stuff---but it'll be a lot smaller group of people---maybe 5% of what it is now, IMHO.
In another 40 or so years, I suspect a lot of these muscle cars that people have chased will be real white elephants, and common cars will simply be relics. Model T-A era stuff is going that way already, and when the boomers are gone, few will want it, I think.
"German courts rule on status of rare Mercedes-Benz 500K roadster
RM Auctions
1935 Mercedes-Benz 500K roadster: object of desire, source of contention
By: Graham Kozak on 6/01/2012
'The saga of a rare 1935 Mercedes-Benz 500K roadster has taken yet another intriguing turn. German courts have ruled that the vehicle is the rightful property of German industrialist Hans Prym's grandchildren because it was illegally seized from Prym in 1945.
Frans van Haren can't be too happy with the ruling. The Dutch businessman and vintage-automobile enthusiast paid $3.76 million for the car at the 2011 RM Monterey auction, only to have it impounded in March when he attempted to exhibit it at the Techno Classica Essen. He now stands to lose both the car and the millions he spent on it.
The top-of-the line 500K, one of only 342 built (of which 29 were roadsters), was purchased new by wealthy German industrialist Hans “The Zipper King” Prym. Whether obtained legitimately or claimed as war loot, the car left Prym's possession in 1945 while he served a war-related prison sentence.
The car was then shipped to the United States, where it was owned by a series of collectors. It even spent time in the auto collection of the Imperial Palace casino in Las Vegas for a while before turning up for auction last year at Pebble Beach.
The $3,767,500 that van Haren forked over for the Benz was below the $4 million to $5 million preauction estimate published by RM, but considering the trouble that ensued, it's hard to call the purchase a bargain.
By bringing the car to Essen, Haren unwittingly exposed his magnificent Mercedes--back in its home country for the first time in nearly seven decades--to immediate seizure (or repatriation, depending on one's perspective) by German authorities. German law dictates that the 30-year statute of limitations that would normally make the vehicle immune to seizure is only in effect while it is physically in the country. Since the car spent its postwar years in the United States, the 30-year period began only when the car was returned to Germany. Upon its return it became eligible for impound.
There's no word on whether Haren plans to contest the court ruling or whether he has any grounds to do so.' "
"INVESTMENT GRADE Ferraris like the 400 Superamerica and 365 GTB/4 have outstripped gold in returns.
FOR solid financial returns, gold seems nearly alone among investments that are legal — and fathomable — to those of us who are not bankers. Gold’s performance over the last five years has been overwhelmingly positive, its price per ounce more than doubling since 2007.
But the skyrocketing prices of certain Ferraris built from the 1950s through the 1970s have in some instances made gold’s gaudy rate of appreciation look like a passbook savings account at the neighborhood bank branch.
'People who have been in the collectible automobile market and originally bought for the love of object are now looking at it as a diversification tool and a strategic part of a well-organized investment portfolio,' Claiborne Booker, an independent financial consultant based in Virginia, said.
Certainly, Ferraris are not the only vintage vehicles whose values have outstripped inflatiand conventional investments, but they have been one of the most reliable market indicators among collectible automobiles. And their sales at auctions are closely followed, so there is a reliable track record on which projections can be based.
Examples of impressive returns can be found in several Ferraris consigned to the auctions that took place here in the days around the Pebble Beach Concours d’Élégance. Gooding & Company of Santa Monica, Calif., offered a rare 1962 Ferrari 400 Superamerica Coupe Aerodinamico, one of only about 14 built by the coachbuilder Pininfarina, each car individualized for its first buyer. No two were precisely alike in their details.
That car was offered with Gooding’s presale estimate of $1.75 million to $2 million; it sold for nearly $2.4 million, including buyer’s premium. The same car sold nine years ago at a Barrett-Jackson auction in Los Angeles for $432,000. That represents a $2 million return in less than 10 years, a period that some investors consider a lost decade.
Perhaps those results could be attributed to good luck or great intuition. But the timing of the buyer in 2003 could scarcely have been better: shortly after the red Superamerica was purchased, prices for the model began to rise, indicated by sales of other Superamericas: a $560,000 sale of a similar car in late 2005, followed by a jaw-dropping $1.6 million sale in Pebble Beach in 2008 and culminating with a $2 million sale at RM’s Monterey auction last year.
The year-over-year difference between this year’s sale and the one last year is an impressive $400,000. Condition, ownership history and the circumstances of the sales are all influencing factors in the price, surely, but the trend is still unmistakable.
Later, higher-production Ferraris like the 365 GTB/4, commonly known as the Daytona, have also seen increases in price exceeding that of gold over the same period. The Daytona was one of the last models whose development was influenced directly by Enzo Ferrari. They’re brutish, exceedingly handsome and quite fast even by today’s standards; with a top speed of 172 m.p.h., the Daytona was the fastest production car available for much of its time on the market.
RM Auctions of Chatham, Ontario, offered two Daytona coupes this year, a black 1973 model and a bright yellow 1972. The yellow car had a relatively active auction history over the last decade. The same car was offered at a Bonhams auction in Massachusetts in 2003 where it failed to sell on a high bid of $97,000. Six years later, Bonhams once again offered the car, this time at its auction in Carmel, Calif., where the seller again declined the high bid — which, at $210,000, was more than double that of the last time out.
This year, the presale estimate for the same car was $375,000 to $475,000. The third time across the block was clearly the charm, and patience paid off: the yellow Daytona sold for $396,000, while the more staid black car went for about $30,000 less.
The impressive returns have not been limited to Ferraris and other rare European exotics. Following Carroll Shelby’s recent death, there were an unusually large number of Shelby automobiles offered in Monterey.
There were predictions of a Shelby feeding frenzy, but in reality the market seemed to have taken Mr. Shelby’s death at age 89 into account quite some time ago. Even so, over the last 10 years, the most collectible Shelbys have done quite well.
For instance, RM’s auction here included the sale of a 1965 Shelby Mustang GT350 R, a rare competition version of the GT350, for $990,000. Three years ago, in the depths of the recession, Russo & Steele sold a similar car in Monterey for just $396,000. In 2003, RM Auctions also sold a GT350 R for $206,700.
To maximize the return on a Shelby, however, one’s timing had to be astute —either getting into the market in the early part of the last decade or buying after a recent, but apparently short-lived, correction. It should be noted that at the prerecession height of the market in 2007, these cars were trading for prices near what the RM car brought.
Just as gold has had its share of peaks and valleys, so have collectible automobiles. Ferraris in particular have had periods of considerable volatility.
According to Michael Sheehan, a Ferrari historian and dealer, the market has imploded twice in the last 30 years or so. The first time was in 1979, and then it happened again — spectacularly — in 1990 after a sharp downturn in the stock market, coupled with the bursting of the Japanese real estate bubble, began a slide in the Ferrari market. By 1995, some models lost 75 percent of their value.
'There’s no sign of an imminent bubble burst in the current market, but most people don’t realize that some Ferraris still haven’t regained their 1989 highs,' Mr. Sheehan said.
Naturally, this raises questions about the wisdom of buying a classic automobile for its investment potential — after all, there are storage, maintenance and insurance costs to consider — rather than the pleasure that ownership brings.
Drew Alcazar, founder of the Russo & Steele auction house, said in a telephone interview that he had witnessed three previous boom periods in the collector car market before the current one.
'Some of the really big cars eclipsed high-water marks from a few years ago that we didn’t think would return this soon,' he said. 'While there are without question certain cars that are blue-chip cars, if you wake up tomorrow to find that what you paid XYZ for is now worth five bucks, but it still puts a smile on your face, then you’re doing things right.'
'You should do your due diligence and then buy what you like,' Mr. Alcazar said."
Making money on cars as investments is like playing the stock market to make money---you have to have a pile of cash and you really have to know what you are doing. It's not a game for beginners.
Also, a rare Ferrari in bad condition can cost a frightening sum to make right.
One thing the article doesn't mention is that very rare cars can be counterfeited. you might not think it'd be worth it to fake an entire automobile, but if $5 million bucks is at stake, and you have a VIN plate, you can have everything reproduced by craftsman. After all, many of these cars were made by hand in the first place and many parts, like engines and frames, were originally fitted from far more common "related" cars made in greater numbers.
Always beware of a rare car that suddenly "appears" with no prior history.
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