Who's making the high price market on collector cars?

I don't think you or I make the high price market simply by hanging on to old cars.

We've seen a trend over the last 5-10 years where pre-74 European sports cars, in particular, have become the ones to own. Dino 246s, Daytonas, 330 GTCs, any vintage Porsche 911 and 356, Mercedes 300 SL, etc. Even basic classics like Alfa Giulietta Spiders from the '50s have moved up.

A lot of us don't view modern cars as keepers, because the nature of the beast has changed from "forever" stuff -- gauges, gears and grease -- to TFT displays, computer-controlled transmissions, drive by wire, etc. Look at the values of the Aston Martin Vanquish or DB9 compared to the DB5 or DB6. Or the Ferrari California versus the 275 GTS. Or the Porsche 997 versus a 911S 2.2 or especially a 911 Carrera 2.7 RS. Or a Merc SL, SLR or SLS versus a 300 SL Gullwing or 300 SL Roadster. Someone somewhere is probably sitting with a Vanquish and not driving it because he's convinced it will be the next car to get hot. Serious collectors don't seem to agree.

Personally, if I'm spending $40K-$50K on a modern car, I accept that if it gets the job done, is reliable and reasonably entertaining to drive and look at, then it has served its purpose and I don't expect to cash in when the time comes to let it go. But, $100K or $200K is more than I would spend without thinking about the intrinsic value of whatever it is that I'm buying, and I (and many others) don't see that intrinsic value in a new McLaren, Ferrari 458, Merc SLS, etc. I see a depreciating asset with technology that will be outdated in a few years. If you look at what other enthusiasts are doing, I think you'll see that they see Gullwings, Carrera 2.7 RS, Speedsters, Daytonas, 246s, etc., as the kind of cars that will be sought after 5, 10, 25 years from now. Among modern cars, you can lump the 993 Turbo and Ford GT into that category.

As much hoopla as there is over the new Jag F-Type, Ferrari 458, Porsche 991 GT3 and such, it will be interesting to compare values in a couple of years to the E-Type, glass 308, and 2.7 RS. IMHO, the serious money-- even among some younger players (look at Adam Levine, the singer from Maroon 5...) -- is chasing the collector car market higher and leaving stuff like used DB9s, 360s, Bentley CGTs in a depreciation spiral that may continue until the cars are recycled and forgotten.

As much as anything, I think it's this realization that the mid 1950s through 1973/4 were the golden era for sports cars, and lot of money (the Dow has added 10,000 points since March or April of 2009) is chasing those. There will always be money-no-object/I-want-it-new buyers for the latest supercar, but the collector car market is more complicated.

 

It's pretty much investors now just like in 1989-90. And it's not just cars. Investors are throwing money at high end collectibles of all kinds. This is often the result of free money (interest less than inflation). It's happened many times in the past. The end is often very abrupt and unexpected by most.

Dave

 

And don't forget that when the guys with real money decide they like
a late 50's Ferrari they don't buy one they send their guy out to find 3 or 4. Just like the art market- don't buy one Picasso buy lots. This means there are that many fewer on the market and the prices go up accordingly.
Making their own market maybe?

Tom

 

Property market improving, stocks moving up at pace- watch out for the investor money rotating out of cars and other collectables as the investment return equation rebalances.

 

I've often wondered... My first Ferrari, 1966 330 GT 2+2, was purchased in 1979 for $8,000. There was NO reason to do it aside that the car pleased my eye and ego. Could a more sensible investment been made? Of course, but I have no regrets.

There was no Internet, therefore no forums or means to quickly acquire "do's & dont's". Most information was had through Hemmings, which was substantially larger than it is today. Formal clubs involved US Mail, and that took far too long.

The 330's value has escalated quite a bit since then. I had always planned to add a 330 GTC. Current auctions have caused me to rethink this.

I see the reason for the current prices to be the result of Barrett-Jackson, RM and Goodings, to name a few. If a specific vehicle sells for some lunatic amount, owners of "similar" vehicles suddenly believe theirs should be priced accordingly. The flaws in this thinking is obvious.

Are we on a bubble, price wise? Time will tell.

 

Wisdom.

 

I respectfully disagree. The modern car that becomes an instant collectible is the rare exception. Additionally, technology or enthusiast acceptance has virtually nothing to do with which cars become valuable.

As an example, the Dino which was frowned upon as not even worthy of being called a Ferrari. It was not desired in it's day and looked down upon for decades. Today it is soaring.

Most of todays newly valued collectible cars are valued because of a nostalgia affect that takes 30- 40 years or more. Cars that were exceptional (for any number of reasons) or beautiful at the time that are now scarce or rare in exceptional condition suddenly become collectibles. This occurs after a long period where the cars mostly depreciate or go sideways indefinitely. These cars must go unwanted for long periods so that they are dispersed, abused, and destroyed.

Many of todays cars will be valuable in the future. It will take decades and decades and decades before they start to appreciate. Buying one new today to catch that appreciation would be foolish.

The 458 is epic and will likely be judged highly by history. Of course, I purchased it for the pleasure. I imagine I will be dead before it becomes an investment. I'm OK with that. Actually thrilled to be able to enjoy it in it's day.

I think you are over thinking this.

 

I'd throw another factor in: the majority of folks who were/are in a position to realize the benefits of the Dow's rise and the housing market boom of the past two decades are of an age to remember when these cars were the "be all and end all" of the automotive world.

 

It could be one or two absurdly above market sales, by a couple of individuals battling at auction for the same car. It's now not about the car, but who has the fatter wallet. If you have 2 Dino's sell for 200k in the same year, that would set a value to anybody who owns one. Now those owners put their Dino's up for sale at say 175k, and they sell...there is your market or bubble.

Somthing is only worth what somebody will pay for it. If those Dino's never hit that 200k mark, they very well could still be somewhat affordable, and still looked upon as an entry level exotic, much like the 308.

 

I can't speak to the European Sports car market but for about 10 years now Barrett Jackskon, the other televised auctions and several of the car show like Desert Car Kings have inflated the muscle car prices to the point of absurdity. They shill bid an Chevelle SS clone up to $50k and every yokel with one rotting in their back yard thinks it worth $10k. There was a time when a regular guy could buy a rough car for $2500, turn some wrenches, splash some paint and have a nice driver for under $10k. I saw one of the shows "find" a 73 Nova rolling chassis in a junk yard and paid $5000 to "save" it from the crusher because it had good glass. No floor pan and not a single straight panel, just made for TV drama.

 

just another modern v8 ferrari.... soon to be surpassed by the 4XX in virtually every measure.

 

Looks matter--- a lot. The 458 is epic in every way. Absolute performance does not matter that much when these cars become collector cars. The performance of all of the early Ferrari cars were exceeded by later models. These cars are not highly valued because they are the fastest.

Rare and desirable.

The 458 is special. Time will tell. Today's buyer shouldn't care. How many people will own these cars for the 30- 40 years that it will take for them to be appreciated as a collectors item?

 

this.

 

True, although I think anyone who was driving cars in the 1950s when the 300 SL Gullwings were the be-all and end-all is probably well into his 70s at this point, so I suspect the collectibles market is more than old coots.

Yup. The 360 F1 was "epic" not that long ago, and people were investing in those.

Not a collector car.

 

I've always thought there were two collector markets.

The first being the professional collector that pays the big bucks, 12 mil or so, for a 250. I also suspect this demographic buys the LaFerraris and Enzo's.

The second being the middle aged professional that has saved and worked for 20-30 years and now wants his teenaged dream car. I've been surprised at the number of guys I've met that always wanted a Dino 246 because it was the car they lusted after when they were young. I suspect the muscle car market feeds this.

 

There's a lot if truth in this.

One predictor of the second type may be what the initial reaction to the car was when introduced. Right or wrong mass opinion of dream cars is shaped by the press. I'm hard pressed to think of a hot collectable that didn't receive great reviews in period.

 

This!

I thought the Dino was looked down upon in its day? I know in the late 80's it was.

 

+1

 

The Dino never came out on top in contemporary comparos but was (almost?) always viewed as most special. Looking at the cars that got better numbers in period is there even one more desireable today?

 

No, but is that because it was a SORT OF de-badged Ferrari (engines made by Fiat)?

It was also made in relatively low numbers and therefore rare today in pristine condition.

And to top it off... It's a beautiful looking design.

Wiki...

"The "Dino" brand was created to market a lower priced, "affordable" sports car. The first brochure described the Dino as "almost a Ferrari". Ferrari intended to do battle in the marketplace with Porsche and its 911. The more expensive road going Ferrari V12's of the time were no match at their much higher price point. But Enzo did not want to diminish the Ferrari brand with a cheaper car, and so "Dino" was born."

 

for starters... i think you need production numbers not much above 1,000

 

snip

I think this is true but then education and refinement of the model/options and satisfaction level of ownership is where the future buyers will eventually level the price.

 

I'm that middle aged guy - 56 - who had a poster of the Dino when I was in high school and drove a yellow X1/9 because that's as close as I could get. Now, of course, they're ridiculously expensive and I could never afford one. And that's OK, because I wouldn't want anything that old anymore anyway. I want something more modern and reliable - and with a better performance envelope - but still reminiscent of the Dino, so I'm shopping for a 360 to put next to my 456M (And the 456M is a modernized version of the 365GTB4 2+2 I loved in the 70's).

I know a lot of folks on this board like the old, purist, visceral stuff, but I welcome technological advancement. In the future, our then primitive electronics will be as easy to repair as old analog gauges are to us. Probably easier, with Star Trek type replicators or some such.

The vintage car market is crazy, as far as I'm concerned, but the vintage guitar market is absolutely insane. All the great historical axes are now owned by rich guys who can't play, and none of the great players ever get to have them. That rubs me the wrong way. I imagine some car guys feel the same about the vintage Ferrari market: The guys who could really drive them never get to.

Cheers,

George

 

Dude I totally want a 246 in my garage with the 360. I saw an architect that had a 360 and a 246 in his garage. Both red, and I thought to myself "oh yeah". One day.. one day.

I have a good friend who had the same poster and as a teenager went for rides with a friend in his dads 330. He'd love one as well but they're out of the ballpark price wise.

Agree that a car should be driven and not hoarded. Was it Paul Allen that has the WWII fighters in his collection. Mr. Allen if you're reading.. fly em'!