2007 brought solid gains amid sharp contracts. So what lies ahead in 2008?
Despite a roller-coaster stock market, high oil prices and the decreasing value of the dollar, the past year saw solid gains for the collector car world. It was a year of sharp contrasts: Christie’s, one of the world’s premier auction houses, closed its motorcar division, while other auction houses expanded the number and size of their venues. Of particular note is Barrett-Jackson’s announcement of a Las Vegas auction in 2008, while Gooding & Company expanded into the January Scottsdale/Phoenix auction market. Russo and Steele also announced a winter Florida auction. RM Auctions added sales in London; Maranello, Italy; and Hershey, Pennsylvania.
At Barrett-Jackson’s January 2007 Scottsdale Auction, everybody in the business took notice when “Carroll Shelby’s Personal” 1966 Shelby Cobra 427 Supersnake sold for a mind-boggling $5.5 million. Other premium cars did very well, too. The feared market correction never really came, although great cars increased their value, while clones and questionable cars languished.
The year 2007 might be recorded as the year in which the “barn find” became codified, both in our language and as a potential choice for a collector vehicle. “I see more cars being kept in original condition,” says Donnie Gould, an RM Auctions motorcar specialist. “They are becoming much more important, as there are less original cars out there. Having a car in original condition puts variety into a collection, just like having a number of different marques represented.”
The addition of a survivor class at Pebble Beach (Concours d’Elegance) now has people searching for exceptional unrestored cars. At its inaugural Hershey sale, RM sold a totally unrestored 1911 Oldsmobile Limited for a substantial $1.65 million. Perhaps even more importantly, the car was the headliner for the October event, and its sale is still being talked about in magazines and on blog sites.
Even venerable concours such as Pebble Beach showed their ability to surprise by recognizing Harry Yeaggy’s 1935 Duesenberg SJ Special, later known as the “Mormon Meteor,” as Best of Show – becoming the first racing-class car in Pebble Beach history to take top honors.
WHAT DOES THE FUTURE HOLD?
Amid the changes and challenges, overall it’s been an extended period of smooth sailing in the collector car market and for most hobbyists. However, storm clouds change from year to year. For 2007, they took the form of proposed legislation that would have limited older car usage and enjoyment, as well as repercussions from the weakening economy. Continued bumpiness in the stock market might prove to be a factor, but its long-term effect is yet unknown.
Will online catalogs and auctions replace swap meets, because of their availability, ease of use, payment and shipping flexibility? For those of us who have experienced the thrill of finding an “unobtanium” part at a swap meet, it might be tough to believe. But shopping in pajamas, using a credit card and overnight delivery certainly has piqued the interest of many collectors.
Service organizations, professional societies and social clubs are aware of the challenges the 35-and-under age group presents. They are not “joiners” – their social networking is largely done online rather than in person. This dynamic presents an interesting dilemma for car clubs large and small. The question remains, will the next generation organize and show up at automotive events?
But for now car collecting continues to be a family affair for most of us. The next generation of car collectors also seems to be less interested in the “get out and get under” aspect of old car ownership, perhaps presenting ample opportunities for younger people bitten by the old car bug to develop skills as specialized mechanics or restorers. Attending shows and riding in old cars remains a popular pastime for many of the next generation of car guys.
Hobbyists remain concerned about the effects of ethanol-blended fuels and reformulated oils in their collector vehicles. Like the removal of lead additives from pump gasoline a generation ago, perhaps these issues will turn out to have relatively little effect on the hobby. This remains an issue and a concern where the jury is still out, although the effects will be understood as a result of an ongoing study Hagerty has commissioned at Kettering University in Flint, Michigan.
A recent hobby survey administered by Hagerty reports that the cost of gasoline and the price of gas were less important last year than in 2006. In fact, 55.2 percent reported that high gas prices were not at all important to their usage of their collector vehicles.
Charlie Stitzer, a collector car owner in Richmond, Virginia, agrees with the survey’s finding. “I’m not happy about the increase in gas prices, as it adds to my commuting cost and overall budget,” he says. “But for my hobby cars, gas is a very small fraction and it’s worth the money.”
For the higher-end collectible cars, the continued slide in the value of the dollar vs. the Euro, Pound and Canadian Dollar has had two divergent effects: For current owners, the value of their cars has risen to near and, in some cases, above record levels. But for those wishing to purchase in dollars, the cost has skyrocketed.
Ed Waterman, owner of Motorcar Gallery in Fort Lauderdale, Florida, has witnessed this whipsaw effect before. “There are cars that are selling to other countries, including some emerging markets, but not so much to Europe,” he says. “The Canadians are coming down in droves to buy cars. Most of the market activity continues to be in the United States.” Still, Waterman states, “International transactions happen less often now than in the ’80s.”
One need only look at the recent resurgence in hot rod visibility and popularity to see how quickly trends can develop in the collector car arena.
Those who have been involved in the hobby for 30 or 40 years have witnessed many of these changes in popularity and collectibility. While the purists look down their nose at resto-rods, the recent phenomenon of earlier cars being retrofitted with new drivetrains and modern conveniences, including air conditioning, full-power high-end audio systems and more, has appeal to a segment of the marketplace for their turnkey operation with classic styling.
Even rat rods – homage to an era after World War II where returning soldiers built their jalopies with little regard for cosmetics – have returned. In fact, whether hot, street, rat or retro precedes it, rods in general are showing an increased presence in the portfolio of collector vehicles.
Exceptionally well-documented and iconic muscle cars are riding out the troubled waters, but the cars with sketchy histories – and certainly those cars cloned from lesser vehicles – have seen sharp decreases in value.
While some cars have already adjusted downward from their record levels, Motorcar Gallery’s Waterman, who has been in the business of buying and selling vintage exotics for more than 40 years, has become bearish at some of today’s prices. “Some cars have gone up in value so much that they will have to stop and adjust,” he says. “But I don’t see this adjustment happening anytime soon.”
Market watchers are looking for increases in value in 1950s “jukebox-styled” cars that might have missed the last go-round of value increases. For every 1959 Cadillac with its outrageous fins and one-of-a-kind styling, there are hundreds of lesser-priced Buick, Pontiac, Dodge, Mercury and other major makes – as well as orphan cars, such as DeSoto and Studebaker – with distinctive 1950s styling cues. If and when the cost of entry into the ’50s market takes off, expect to see more chrome-laden and pastel-painted cars being piloted by those whose memory of the ’50s came from reruns of the era’s shows and not from actual experience.
THE CHANGING FACE OF THE HOBBY
The pundits who proclaimed the death of the Brass Era Cars are eating their words, as recent auction prices of high-horsepower pre-1915 cars have soared in the marketplace. Newer car guys have replaced their fathers and grandfathers in discovering the merits – and challenges – of pioneer motoring.
Bill Scheffler, chairman and cofounder of the Connecticut-based Fairfield County Concours d’Elegance, has some thoughts on collecting. “Automobiles are in our DNA,” he says. “Many of us baby boomers now have the time and money to appreciate the automobiles we couldn’t afford, but truly wanted, when we were younger. We were all aware of car culture growing up, because of magazines, music and movies about cars. It’s all been a part of our lives.”
Along with the expansion in local car shows, hot rod events and regional concours, the auction market has gone from red hot to white hot in the past few years.
Gooding & Company, Russo and Steele, RM Auctions and Mecum have all seen growth in the number and size of their respective events. Other auction houses have been reporting record sales, both in terms of dollar volume and number of cars sold. The auctions themselves have become destination events, with entire families often in attendance. Perhaps this is the result of increased TV coverage or the relative ease of sellers marketing their vehicles at auction. “The general public is getting a little taste and wants more,” Scheffler says. “You can easily be channel surfing and come across an auction coverage show. Russo and Steele, RM Auctions and Barrett-Jackson are all more visible as a result.”
One thing is certain: Our hobby is maturing. And as it does, it continues to offer a broad spectrum of activities, events and opportunities. It is a hobby that can be celebrated alone or with a group of old – or new-found – friends in person or across a broad reach of miles. Our hobby remains sound, interesting and, most of all, fun.
To see this article in its original format, view the pdf version of the Spring 2008 issue of Hagerty magazine.