Arizona Auction Results

1) I understand this aspect. What I am talking about is how we go up to that value in the first place, which is heavily favorable to seller/auction house via reserve setting. And apparently lots sell after auction if that reserve isn't met, so sometimes the highest bid is not exactly that lower price.

2) You are right when referring to the specific car being sold. But when dealing with a car such as a 330GTC, instead of a much rarer car - say the SWB Comp - the price set at auction has a direct effect on the prices of other cars for sale privately. And even a no-sale price will have an effect on market values for that model, because dealers pay attention to the max bid for a car, whether it sells or not, to adjust values of the cars of that model they may have for sale. That's one important reason why we see Dino prices rising both privately and at auction, for instance.

 

The issue is that they are the only ones available on public record, which means that they are pretty much the only legitimate source for the pricing of said automobiles. Dealers can set above or below the prices at auction, depending on the condition of the cars they have for sale, but you can see how the value of cars at dealers will rarely be too far from what the last results for those models at auction were.

I am learning a lot in this thread about the auto auction process, and I should clearly disclaim here that I come to this discussion with an Art market background, which - due to the nature of the goods being sold - is slightly different to that of collectible automobiles. This is all very interesting reading.

 

Auction prices are merely data points and are not definitive. Would a distressed sale be indicative of the true market price?

That said, this community is rather small-ish. If you're tapped into the right bunch, you're going to know (or be able to learn) the pricing of many private sales. That may all be considered hearsay, but there are also pricing "guides" such as those published in Cavallino and FML. They do give some additional insight. However, it's no surprise that almost every asking price is at the highest-end of the ranges published...

CW

 

I think auctions are a good barometer on the feeling of the buying public, and serve that purpose well. For example, in 2008-9, cars were selling at Gooding, but the room was dead- they'd be lucky to have 2 bidders on any car. Compare to last week- the room at Gooding last week was almost giddy, with multiple bidders on almost every car, calling out bids in a way which really can't be faked. People, at least Goodings people, were feeling good about spending some money. Perhaps a little too good.

 

It used to be that auction prices were generally considered to be lower than private sale prices. I sold a car at auction 7-8 years ago (got about what I would have gotten by advertising it and selling it privately, IMO), and on here I got all sorts of comments about how you only get lowball bids and prices at auctions, etc.

 

I attended all of the major auctions in Arizona last week. I think that the extraordinary prices realized for some Ferrari and Mercedes 300 SL's indicate who is driving the(auction) market. There are new collectors out there with deep pockets, they have a narrow field of interest(2 seater Enzo era 12 cylinder Ferrari, Dino 246 GTS, 300 SL) and a number of them buy ONLY at auction. For that matter, a number of them buy only from a specific auction house(Gooding). The atmosphere toward the end of the Gooding sale was remarkable, people bid up the 246 GT and the 330 GT 2+2 almost in a panic, fearful that they would miss the opportunity. Not a good sign, IMO.

 

This was meant to be facetious. I think the prices are amusing.

 

Hi Will,
Just out of curiosity, what do you think 330GTC are worth today. Hope you enjoy the car.
Warren.

 

John, "Nutty" or not, the last few auction results are beginning (if not confirming) a trend in higher prices being paid for more cars across the "valuation" board! it started with(and continues) at the top end, but now is moving its way down through the market. I opine this is going to continue at an even greater pace for some time, with the series production Ferraris leading the way now in larger percentage increases. Keep in mind we are not even in an inflationary cycle yet(coming) and watch what happens to values then! Like it or not, the world has spoken about how it views early Ferraris, and its a limited supply getting smaller every day vs an increased awareness and demand from buyers with an ever increasing money supply(or so it seems)! Look Out!!

 

Hi Warren, I don't know what the recent auction prices mean. Bubble? Ferraris as alternative investments, as someone else suggested? Has my car really almost doubled in "value" in a year? Arguing with markets has never done me much good and, since this turn is a pleasant surprise, I think I'll just congratulate myself, especially in my wife's presence.

Love the car, no plans to sell.

Best, Will

 

It is very interesting that despite the enormous influence economics have on every aspect of our lives, we (meaning people generally) make decisions based on fairly shaky data. I think this is partly because it serves the interests of intermediaries and market-makers to obfuscate pricing signals in order to capture little inefficiencies at the margins. But getting good market data on cars is tougher than you would expect, especially when you introduce the many subjective and objective qualifiers that bear on each transaction.

That said: a personal testimonial relative to the comment above. I certainly began to get serious about building a collectible portfolio after witnessing the impact of the '08 financial crisis on collectibles. Prices softened, transaction volume slowed, yes, but in general the market held up while other assets were plunging into the abyss. Seeing that, I gave myself 'prudent man' permission to acquire a few 'more serious' collector cars. The fact that they've appreciated considerably (on paper!!!) is a bonus, but not the main point. Storage, maintenance, insurance, security costs are so high on collector cars that you need to get a 'double bottom line' return to justify it. Finally, I've been watching the market ebb and flow really since I could read, so... 43 years? I'm confidant the pendulum will swing back the other way as it has before!

 

I think I'd sell mine for that price

 

Wait a couple weeks, they'll be million dollar cars.

 

It is true that auction prices will be lower than private party sales for lower priced cars in which the cost of fixing the potentially hidden issues (e.g., engine, transmission, rear end needs a rebuild, other deferred maintenance) could eat up a large portion of the purchase price. As a result, people will pay more for a private party sale where they can test drive the car and have a PPI done on it, as compared to an auction scenario in which you have only very limited ability to view the car and no ability to have a PPI done on it.

However, for higher priced cars, the cost of fixing the potentially undisclosed issues is a relatively small portion of value, so there is little or no "auction discount". As long as the "big picture" issues check out (which can be done in an auction setting), the undisclosed issues can be sorted without materially increasing the total cost of the car.

Of course, there is also "auction fever", where people get caught up in the moment and pay a lot more than they otherwise would. You can see this effect clearly when the top bidder flakes and the auction house tries to sell the car to the next underbidder for their bid price, only to find that there is no interest.

 

What part of this market belongs to investment funds and the like. I know there are several private funds buying racing motorcycles. Were any similar funds or groups buying these cars at these auctions/

 

I came across this article in this morning's NT Times Digest thatt those following this thread may find of interest:
As Art Market Soars, So Do Oversight Concerns

http://www.nytimes.com/2013/01/28/arts/design/as-art-market-rise-so-do-questions-of-oversight.html

 

Private investment funds being marketed to invest in collector cars is a pretty reliable sign of a market bubble forming.

 

Thank you for this article. It's being talked about for a while (see video suggested here: http://www.ferrarichat.com/forum/142046649-post166.html), and in the case of secondary market & even primary market gallery sales has seen some extra interest with the recent lawsuits against Gagosian gallery, which have revealed some of the less ethical practices within the usually very "discreet" dealings of private art sales. Auctions may be next, though I doubt there will be a significant change. And that's not for better or worse.. Double-edged sword...

 

2 start-up funds were noted mid-2012 in Octane, both were European. Nothing public since then.

 

Investment funds have been mooted and are no doubt players but AFAIK the vast majority of cars are still purchased by American and European private buyers with very deep pockets. They are purchasing with cash, after all there are a lot of billionaires in the USA (425 to be exact) for whom purchasing a car for a seven figure sum must be a very personal experience that would involve ego, research, knowledge, ability and great pleasure. Most of these feelings can not be fully satisfied by buying a unit in an investment.

The last and only time investment funds where playing in the market was 1990 and we all know what happened in 1991. Of course the wash up meant that by 1991/92 all of those cars were back on the market. There does seem to be the option of leasing a classic car as advertised in SCM magazine, and I dont know how widely used that is, but apart from that I havent seen or read of any successful investment schemes purchasing, only schemes being promoted.

With all of the issues with property, Sub - prime, CDO's, CDS's and every other financial hitting every other investment people will turn to other forms of investment and why not buy a collector automobile, after all you can drive it, own it and make money out of it. I would opine that like any other investment just make sure you buy low and sell high.

Eventually I beleive there will be another bubble somewhere in the finance system and all of the money will rush to it. As a mirror image to the Sub-prime or early crises it will involve a form of investment that could (should) have low risk, be easily sold and have some approval from on high. At that point watch for casual auto investors to sell and a glut of availablity on the market. True collectors of course will always covet and retain, for they havent bought to make a profit, simply to enjoy their ownership.

But where will it all end ?. Will we see million $ Dino's, $3 million GTB/4s and $50 million GTO's before prices recede, maybe. After all there is only so much supply and a lot of demand.

 

reading through some of the comments on the last two pages, it occurred to me that how our cars are valued directly affects how we insure them.

As these valuation jumps affect the liability borne by insurance companies, they have an almost equal interest in the recent sales results so it's not too surprising to find people from Hagarty, etc. in attendance at these events.

It would be interesting to hear from one of them on this topic, and how they view auction results in setting values.

ciao

 

I'm sure that they are not disinterested but I'm not so sure that auction results, or any other market values, matter greatly in their insurance coverage. I say this because I use Hagerty to insure my 1983 400i for a stated value. Now, the stated value is about what I think it would cost to replace that car in the event of a total loss and I suppose that Hagerty might question me if I stated the value as, say, $1 million, but the price of my coverage is based on the stated value, not necessarily the market value.

I would expect that owners of the much more valuable vintage Ferraris might also insure their cars for a stated value rather than the "actual cash value" used for ordinary daily driver type cars.

 

I also use Hagerty.
When I purchased my insurance I was told that on policies over $100K an appraisal is advised.
No worries, as I already had one in hand.
It does beg the question though, if appraisals are to reflect market values and, if as suggested here, auction results are the most transparent transactions to set those values, then surely the auction numbers are going to be reflected in higher insurance values (and premiums!).

As for "stated value" my car (330 2+2) was insured for $120K and I know for a fact that they wouldn't write a policy for $170K based on recent auction results because I called and asked.

Recent events suggest a lot of us are seriously under-insured!

 

......insured for stated value (120k).....wouldn't write a policy for 170K based on auction results...called and asked....

....recent events suggest....under-insured....

OR

insurers (Hagerty) do not firmly believe in auction result(s) and their ability to make a market pricng.....see many above posts....

 

that's my point.

how are they setting the acceptable value for "stated value" insurance?

I didn't expect to be able to raise the "stated value" of my car to $170K so what sort of policies are the buyers of those $200K+ 330s going to be able to purchase?