Bonhams Gstaad auction & results

As a consumer entusiast of means which have a limit the market looks like this.

For the past few years good desireable cars for enthusisats of some means (not swbs or 4cam or gtos) got priced into the stratosphere. Same happened with many properties and I assume some art. Same thing happened with very large diamonds.

Now the world is different, some cars will still fetch huge dollars like GTo's because they are in a different realm like truly rare art. Other cars like miuras f40's 288's early countach etc were hyped into being car art and trebled quadrupled in value just like some musclecars because the poseur collectors jumped in. Most of these people have no real emotional reason to staying in and their retirement funds etc probably dictate they start shedding expenses. These cars were bought by millionaires not billionaires and many of these people are viewing the future in a different manner.

The higher prices(not peak) for some of these cars may truly stick because with the inflection of time they have been reclassified, a lusso is a good example, they are unlikly to be $125K again because now they really are viewed differently, but their price like 275's will surely fall.

More sellers less buyers for most, and many boomers wiped and making different retirement plans.

Retail traffic down 25%, Obama to spend 7 trillion or something so maybe it stops the fall but maybe this is still a big blowout. Either way a lot of buyers will not pschologicaly recover enough to get into expensive toys again. So the market is for the very rich and those surviving enthusiasts.

Truly rare holds its value, but what about truly beautiful and desirable but not so rare?

So personaly I can see the 288 comming down to 300k or 200k or 350k and hopefully when it does I will still be standing and able to buy. Right now even if the price were that low I would not buy because the future is so uncertain that I would rather have the security of that money. I am certainly not unique, so that means fewer buyers now, driving down the price of everything. People with money unwilling to buy unless it looks to be a performing asset which a car is not(financialy). And by the time the price really does come down many of the current potential buyers will not be there.

Possibly the 7 trillion works woders, at least untill inflation really kicks in. With inflation the headline number of everthing ,makes sense because the money has half the value. So yes 600k for a 288 makes sense because 600k will be 600k in name only the real value will be 300k in todays money.

Hopefully we will all still be standing and ablel to buy in this beautiful future for enthusiasts. An then the cycle will start all over again, but we are going through a steamroller first.

Business will be done, fortunes will be made, but there will be less of it overall. The wealthy upper middle class, your people with $ 2million to 30 million the people who drove a lot of the exotic but not truly rare market, those people they are gone or going, their remaining money has more susbtative needs, and socialy they do not need to showoff to the crowd.

One prediction, when the cycle starts again we will see that by 2020 a testarossa will be to that decade what the 57 caddy was to the 80's an icon. Saw a white one in FLA today, never realy liked the look, but you know after not seeing one in a while, or pictures, posters etc, it is l dramatic, fresh and visualy arresting.

It is the car market, some go up some go down with evolving tates, the truly exceptional and rare,Bugatti, GTO's F1's, have theri own market, overall though the price of all these types of assets is going down, and it should because like any number of other assets prices were way overblown..

 

With the economy in the toilet, why are the best vintage Ferrari restoration shops still busy as ever with long waiting list to get in?

 

Doug:

This is my understanding also.

But, what do I know?

Cheers,
Joe

 

Good question.

Bobileff is booked a year ahead. I wonder if Russell, Obry et al are in the same boat?

 

Pretty obvious and the same thing happened 20 yrs ago when the market crashed. The cars in restoration now or in line for restoration started the process when prices were going up rapidly. In the next few years, based on what happened 20 years ago, I would guess we'll see those waiting lists shorten quickly and some half-done cars for sale. It won't take much drop in prices to make it cheaper to buy a restored car than to restore one, except for the most valuable cars.

 

Restoration shops are a lagging indicator.

 

I agree with that.

 

You may want to check a bit deeper...

5. VAT: (*) indicates that VAT is payable by the purchaser at the standard rate (presently 17.5%) on the hammer price as well as being an element in the buyer's premium. This imposition of VAT is likely to be because the seller is registered for VAT within the European Union and is not operating the Dealers Margin Scheme or because VAT is due at 17.5% on importation into the UK. The double symbol (**) indicates that the lot has been imported from outside the European Union and the present position is that these lots are liable to a reduced rate of VAT (5%) on the gross lot price (i.e. both the hammer price and the buyer's premium). Lots which appear without either of the above symbols indicate that no VAT is payable on the hammer price. This is because such lots are sold using the Auctioneers' Margin Scheme and it should be noted that the VAT included within the premium is not recoverable as input tax.



Cheers

 

Many Good Points.

 

Interesting VAT data and thanks for posting for clarity.

Back to the value # after hammer. I would agree that the actual price/value of the car is when that interesting, fast talking man says "SOLD" and gives a number backed up on the video monitor for all the world to see. Auctions Ive attended at Amelia or Barrett etc, there was no caveat that the actual price of the car was the SOLD price plus tax or premium. It makes no sense to include those values as part of what the car is now worth after immediate sale at auction.

 

I think it would probably result in something like the following . . .

http://findarticles.com/p/articles/mi_m0EIN/is_/ai_n26817432

 

LOL.

 

Joe and others: I think you are unfairly maligning Jim by claiming that his negative view of the market is part of a deliberate effort to drive prices down for his own benefit. I am close enough to Jim to know that he has no motive or financial interest to do so. The cars he does buy for his own use, while not immune to the current financial crisis, are still sufficiently rare to keep the price of entry virtually insurmountable to all but a few, even at 'cut-rate' prices.

Joe, you are far more involved in the market than I am, but I think you'd agree that:

-Modern and current production Ferrari, Lambo, etc. are nose diving in price;

-The best "obtainable" Lambos peaked a year ago (Miura SV and periscope Countach) and seem to have declined in price. (I regard that unbodied Miura as the sort of "unobtainable" collector's item that may be impacted by financial uncertainties, but still so rare as to make a "discount" academic to the average well-heeled buyer).

-Money is tight, even for "blue chip" collectibles like pre-war Bentley/Alfa/Bugatti and the cars that have no pedigree or special attraction are not moving as they once were. The more pedestrian cars are simply not worth as much in the current financial climate;

-Vintage Ferraris that enjoyed the biggest spike in prices over the past couple years are no longer being chased with a fervor to pay whatever it takes to land one, e.g., Daytona spiders, various 275 coupes, some of the less important 250's and earlier cars. More seem to be on the market right now than at any time in the last decade. This may be a combined result of owners needing cash or those attempting to take advantage of post-peak pricing before it heads further downward;

The truly rare cars may take a hit, indirectly, because of financial uncertainties, but, like the cars Jim seems to gravitate toward, even a big 'discount' isn't going to change that market (I suppose, like the 60 million dollar Van Gogh that is only worth 22 million, values may diminish considerably, but that market, like the market for 250 GTO's, pontoon TRs, etc. is still tiny and in the hands of a very select group of potential buyers and sellers). These are the cars that we do not generally see at auction and which trade privately with the involvement of brokers like you.



Are people now being pushed toward the collectible car market because the financial markets have crashed and are still burning? I don't think so. Isn't that what drove the 'bubble' into the early 90's?

Is auction pricing the litmus? I am sometimes amazed at the variation in prices I see for cars sold at these auctions. Some seem to be absolute bargains (but who knows what really awaits the buyer) and some seem to be insanely high-priced, even without regard to the additional premium paid by the buyer. Does that 11 million dollar Cal Spider with non-matching motor set the price for Cal spiders generally? I doubt it.
Even this Bonhams' auction had a 275 GTS that went for serious money, which was surprisingly high in my estimation (unless the car was so 'done' as to make that price barely exceed the all-in cost of the car with a full, high level restoration). I'm not sure that auction pricing reflects the true market for any of these cars. So, we have to look to private sales, for which information is not readily available. Here is where you could be informative. I think Bill Noon indicated that he has sold some of these "mid-range" Ferrari collectibles for less than recent market prices, simply to move them.

At bottom, I don't know that Jim is right to forecast a complete collapse of all car markets including the rarefied stuff, but I seriously doubt he is doing this for his own financial benefit. As to the impact of buyer's premiums, etc. on the 'real' price of the car, I would have to believe that, except in cases of auction fever, or the truly exceptional car that has no real comparable in value, most buyers take this into account; that is, they adjust their willingness to spend to take account of the additional fees. But I am not sure that those auction prices reflect the true value of these cars for the reasons indicated above.

 

I don't know which is funnier, Joe Sackey professing a "humble opinion", or watching him try to talk up a sagging market

 

Hammer price for the 246 GTS was 155000 CHF, + premium + 4% Swiss Automobilsteuer, end price all included 179550 CHF, no additional VAT or taxes. Car comes from EEC (Belgium) and will stay in EEC (Germany). If the car would have been Swiss registered, the german buyer would have to pay 19% german VAT if the car crosses the border.

 

What exactly do you find funny about the fact that some guys used an internet chat room to post totally false information in a effort to profit by shorting a stock in clear violation of several laws and I brought that to the attention of the New York Stock Exchange and the NY AG and their profitable illegal scheme turned into a really bad day for them?

My family and I for many years have taken legal positions that some have found funny but when the decisions came down they were no longer laughing.
Here's one that resulted in death threats to me. You think this one is funny as well Joe?

http://bulk.resource.org/courts.gov/c/F2/294/294.F2d.36.427.27055.html

Make my day Joe. Publicly State that I am posting information that I know to be false in a effort to profit from it and I'll be more than happy to show you what a really bad day can look like.

 

Glad I don't live in Germany. As the 4 Cam buyer and seller were UK I think the fine print I posted applies in that case. A fairer way to compare sales may be to use hammer price.

Best

 

Swiss Automobilsteuer will be paid back if the car leaves Switzerland without registration in that country. So it's around 173 CHF or about 160 USD for the German buyer. Add about 70 USD for restoration and you have a real market price for a rare restored European GTS with fine history.

 

Very Good Post! Agreed, Agreed!

 

Whart:

Good points.

Its just that when someone makes over 200 posts on just 3 threads that are aimed at talking the market down, one can be forgiven for feeling they have an agenda!

Best,
Joe

 

Jas Jas Jas.

I could care less where the market is: up, down or sideways.

You'll note I'm personally not complaining.

I just think we should be balanced & accurate in our reporting, and stay off too many doom & gloom predictions.


.

 

well said..
its like the media in Australia,they will talk us into a recession.

 

It becomes a self fulfilling prophecy. Almost 70% of the US economy is made up of Consumer spending. When the media day in day out tells people how bad things are, that effects consumer confidence, which effects consumer spending, Resulting in a bad economy. See they told you things were bad.

 

When people fear they may not have jobs next year because so many have already lost theirs then the media may accentuate the issue but they do not create it or the psyche.

Basicaly the world particularily the USA has run out of plausible BS to boost things further. Major assets like homes have been forward sold and now there is no money untill the next story comes along, which it will. Meantimes peoples confidence has been hit, and the boomer generation who bought most of the uneseceray toys does not have enough years left in retirement to forget, so a generation of consumption is blown.

But yes a few years from now at 10 million new cars a year there will be huge demmand and the buildup cycle will start again. The question is are we looking at 12 months from now or 5 years. We are in reboot mode, all assets are repricing to ne lower values, that is just a fact.

Perhaps some of the cash out there will decide to park in certain assets, gold is certainly an example. Other than really rare items I do not think cars fits this asset class. Cars if left parked degrade, thye cost a lot to keep up and stored properly, the market is relatively speaking thin.

 

Jim,

Unfortunately, you're mistaken.

In the EU, once VAT has been paid on a historic car, the VAT remains/stays with the car. The only exception to this historically has been if a Business entity owns the car. In that case, the Business entity can reclaim the VAT once the vehicle is permanently exported from the EU. However, even that is becoming more-and-more difficult to achieve today.

This is highly unlike the situation in most parts of the U.S. For instance, in California, Sales Tax is technically due for each and every RETAIL vehicular transaction which occurs, even if a California retail resident
owns the car for just one day and decides to resell it, etc.

Please find the Catalogue Description here:
http://www.bonhams.com/cgi-bin/public.sh/pubweb/publicSite.r?sContinent=EUR&screen=lotdetailsNoFlash&iSaleItemNo=4165421&iSaleNo=16671&iSaleSectionNo=2

Near the bottom, it plainly states that "the car comes with current MoT and UK Swansea V5 registration document."

In order for a car in the UK to have a V5 Registration document, VAT must have been paid.

Therefore, if the Buyer (i.e. who ostensibly is UK- domiciled but also has a house in Switzerland) takes the car back to the UK, no new/additional VAT needs to be paid. Similarly, if the Buyer wishes to register the car in any other EU member state, no new/additional VAT needs to be paid. If the Buyer decides to register the car in Switzerland at some point, he would then be obliged to pay 7.6% Swiss VAT (i.e. Switzerland is NOT an EU member state).

For the sake of accuracy, your numbers need to be reworked. Apparently, the car sold post-sale for CHF1,087,627 (approximately $997,000). According to the Bonhams Conditions of Sale, the Buyer's Premium is calculated at 16% on the first CHF150,00 plus 11% on the excess, with VAT charged on the TOTAL Buyer's Premium amount. Therefore, on a $997,000 transaction, the NET Sales Price (i.e. meaning the price the Buyer paid for the car LESS the approximately 11% Buyer's Premium and the effectively 1.65 % Buyer's Premium-related VAT) would have been about $885,000.

The "official" Seller's Commission Rates are 15% of the first £5,000 and 10% thereafter. However, consignors often are often able to negotiate more favorable Seller's Commission Rates with auction houses. And, because auction houses are known to do "short deals" for the sake of getting a transaction done, it's hard to discern for someone outside of the transaction to truly know what a Seller EXACTLY "nets" in any given situation.

However, even in the very worst case of the Seller paying the full 10% Seller's Commission, the Seller would still have netted $805,000 (NOT the $600,000 you posited above), at a bare minimum. And, for the reasons noted above, both the TOTAL price the Buyer paid, and the amount the Seller netted, were in no way, shape or form impacted/affected by any outstanding EU VAT issue, because there simply wasn't one.

Therefore, when calculating who got what here, the government got about $16,000 (1.65%), and the house (Bonhams) made about $176,000 (i.e. approx 17.5%).

Just trying to keep the numbers straight for everyone....

Finally, for the sake of accuracy, it's actually possible to reimport a vehicle to the EU on a VAT-free basis within 2-3 years of its permanent export from the EU, so long as the original Exporter of Record is the very same one doing the reimporting, etc.