16 November 2009

Deals, not steals, for some cars

If there is one oft-repeated rumor over this long summer of questionable economic indicators, it's that entry-level collector cars can be had for ridiculously cheap right now. Joe Six Pack has lost his job and is in hock up to his eyeballs, so he's letting go of his pride-and-joy for 60 cents on the dollar – or so the rationale goes. While this certainly seems plausible, there's just one problem with the scenario: We haven't seen it actually happening this way.

Let's consider Worldwide's Auburn, Indiana, sale as our test case. To set the stage, this auction was held over Labor Day Weekend, just down the street from the troubled Kruse event we reported on last month. Half an hour from Michigan, where the unemployment rate hit nearly 15% in August, selling conditions were challenging at best. If there were truly a fire sale happening, it seems like this would have been the place to find it.

Of the 33 cars sold, 10 changed hands for less than $20,000. Among those, three qualify as market indicators. The first two are relatively mainstream models with broad appeal: A convertible 1979 VW Beetle that sold for $18,700 and a 1967 Ford Mustang with a 390 V8 that garnered $14,850. The third is a 1984 Hurst Olds Cutlass with the infamous Lightning Rods shifter which went for $14,300, and we'll explain why this one matters a bit later. (All prices include a 10% buyer's premium.) What's notable is that none of these cars sold for an exceptional amount of money, yet neither did any of them represent a real steal for the buyer. All three are what we would call fairly bought and sold.

Take the Beetle, for example. The latest edition of the Hagerty’s Cars That Matter price guide calls a #2 condition example of this final ragtop Bug a $21,200 car. Its sale price was about 20% less (once you subtract the buyer's premium), far from the sorts of steep 40% discounts we've been hearing of. Further, there's a pretty good explanation beyond the economic one why this car sold on the lower end of the pricing spectrum. First off, it wasn't a particularly nice example, despite being something of a time-capsule car with less than 5K miles on the odometer. Let's put it this way: Triple white does not age as gracefully as triple black. While the low mileage sounds great in an auction catalog, it leaves the new owner veritably hog-tied. There isn't a thing at all he can do with the car that isn't going to diminish its resale value, a fact that its all-vanilla appearance doesn't help.

The Mustang might represent an even better lesson. Sold at just about half of what a true #2 condition '67 Stang with the 320-horsepower engine option should have, could this be one of the deals we've heard of? Not likely. As far as Mustangs go, this one is probably a nice weekend driver – that's what the auction catalog said its owner has been doing with it – but it's far from a #2 car. To start with, its engine has been rebuilt with a number of non-original parts and it's wearing aftermarket wheels. Then there's the fact that it sat for over five years in a museum, which led to it needing some recent brake and cooling system work. All of a sudden, this car looks like less of a bargain and more of a gamble, which is why it sold for about 85% of the $15,950 our price guide lists for a #3 example.

This brings us to the Hurst Olds, a car that will do stand-in duty for all the other oddball collector cars that have small, but devoted followings. Viewing the car before the sale, there were equal numbers oohing and ahhing as were snickering and chortling. Never mind, as when all was said and done, this all-original, 37,000-mile example was the most spot-on price of the sale. Befitting its condition, its sale price was nearly exactly between Hagerty's Cars That Matter values for a #2 and #3 condition car.

So what can we learn here? The Olds is a good lesson in marketing, as it only takes one motivated buyer to sell your car, and fanatics tend to be more willing than casual hobbyists to pay full price when money is tight. The Mustang proves out the adage that condition is everything, even more-so during hard economic times. And the Beetle tells us the truth about how recent economic troubles have affected the market for affordable collector cars: There are deals on this end of the pricing spectrum, but you're not going to be stealing good cars for under $20,000. Expect at most a 15% discount as a buyer, paying prices more resembling those of five years ago.

7 Reader Comments

  • 1
    Duane Colorado January 9, 2014 at 17:46
    First off there is no such thing as a deal at any auction that I have ever been to. People pay stupid money for anything at auctions. For some reason people get all caught up in the auctions and when they think someone else wants what they want they think it must be worth it right ? Well go buy any car at any auction and then try to sell it on the open market and you won’t even get close to what you paid for it at auction. Why do you think Barrett and all those auctions are all ways passing out drinks! I have watched many cars being fought over at auctions just to stop on my way home and pick up a newspaper or auto trader or check Craig’s list etc., and if not at a dealer find the same car in way better condition for considerable less money! I have never understood how any of these auction companies or Classic car dealers have ever stayed in business? Other than they make it convenient for the buyer to see a lot more cars in one area. If a person is willing to search the classifieds around the country there are some truly great deals out there it just takes patience.
  • 2
    barry goldstein United States January 9, 2014 at 18:12
    The short story; I always have dreamed of a 1966-1967 StingRay Coup Automatic. Since I can't afford the HIGH PRICES, is there any way someone can recommed gettting one without spending crazy $$$$. Thank you Looking forward to responces.
  • 3
    Jeffrey Chase Metro Detroit January 9, 2014 at 20:30
    The unemployment rete for Michigan was 8.8% for December, 2013, not 15%. Most of the baby boomers or Gen X folks have jobs, or are retired--and they have 75% of the cars. Hence, no fire sales.
  • 4
    Joe Central VA October 28, 2015 at 18:39
    Barry, keep hoping for an inheritance. But I do have an idea. I've always wanted a '67 GTO and found one at--gasp--$10K locally. It needed another $10K in paint and interior to make it a great driver, as the mechanicals were all sorted out. In the end, it was too much car for me, since I wanted power brakes at least, power steering at best. Loved the Hurst and the 400 HO, however. My plan is to find a lesser GTO and fix it up slowly, as I've done with two other classics. I could care less about a #2 car. That Mustang is the sort of ride I like. I would not be afraid to take it out for weekend fun and short trips. You might find a project Vette and, if you are willing to put time and love into it, achieve your dream. Why not try a less expensive Corvette, address any issues, sell it later at a profit, and slowly move toward the Stingray? You'll get to enjoy many different cars that way.
  • 5
    Mike Tacoma wa October 31, 2015 at 12:48
    How come there is zero talk about TRUCKS!!!
  • 6
    Ken Geelhaar Parkville, Md November 5, 2015 at 08:24
    Nice article Jeff. I think most passionate car enthusiests do not sell cheap when times get tough for them. People take cars to sell at auctions so they do not have to deal with the insults and hassles with other people. I know for me if I lose everything financially I will be cutting up and hammering my classics just to keep the rich from ever getting their hands on them!
  • 7
    Vince Detroit April 4, 2016 at 14:43
    It's a Mustang coupe. Make it a fastback and double the price provided you can find one that hasn't been cloned to Eleanor. Good luck finding a 390 convertible.

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