Dealerships like where the market is headed
Glowing reports continue to pour in about the recent rebound of the collector car market. Auction houses boast record-breaking sales, high sell-through rates and rising attendance. But what about collector car dealers? Are they feeling a ripple effect? What’s hot right now? What about the future?
Hagerty contacted representatives from three respected collector car dealerships – one each from the South, Midwest and West Coast – and asked them a series of questions pertaining to the market.
Offering their views of the market are Hayes Harris, founder of Wire Wheel Classic Sports Cars and Race Cars in Vero Beach, Fla. (www.wirewheel.com), which specializes in British cars; Todd Wertman, co-owner of European Collectibles on PHC (Pacific Coast Highway) in Newport Beach, Calif. (www.econpch.com), which specializes in Porsches; and Bob Lichty, president of Motorcar Portfolio, LLC in Canton, Ohio (www.motorcarportfolio.com), which offers a broad range of collector vehicles.
Q. Have you seen any significant changes or interesting trends in the business during the last year?
Todd Wertman: Yes, there seems to be a stronger-than-usual demand for good quality drivers in the $50,000-$250,000 range. This price range has always been strong for us, but today it seems to be a particular focus for high-end collectors who could be shopping in any price range.
Hayes Harris: We’ve been dealing in British sports and race cars for over 20 years, and I’ve never seen the collector car market quite like it is now. It is generally very good, despite the “slow” economy. I think many people realize that their investment car is probably doing much better than their other investments, such as real estate and stock portfolios… plus they’re a lot of fun.
Bob Lichty: It appears that the market is strong and getting stronger. With little to no interest from bank accounts and with real estate still in the dumper, it appears tangible investments like classic cars make sense to a lot of people. As a result, the first quarter of 2011 really has been surprisingly strong in our showroom, and the auctions have been good, as well.
Q. Have sales increased, decreased or remained about the same?
Harris: It’s been a bit of a “roller coaster” in terms of sales volume. We aren’t selling as many cars as we did five years ago, but we are selling more than we did one or two years ago.
Lichty: Sales are most certainly up – in almost every category.
Wertman: Sales in the past 12 months have increased significantly.
Q. Any surprises?
Lichty: Yes, ’60s luxury cars, such as very clean examples of Cadillacs, Oldsmobiles, Lincolns and Imperials. Surprises – 1955-57 Thunderbirds. This was a market that was not overextended; these cars always went up at a slow, steady and secure pace. But when the muscle cars and Corvettes hit the fan for a downward spiral in 2010, it also pushed T-Birds to a long-time low. I would think this is a temporary glitch in the values on early Birds. We are seeing super-clean or well-equipped T-Birds starting to show some hope.
Wertman: There has been so much talk and speculation about the impending upward explosion in the 300SL market. I’m NOT surprised that it hasn’t happened. We can always find a few cars.
Harris: No real surprises, but I think that we need to accept the fact that five years ago, the market was a little unrealistic and it couldn’t sustain the momentum that was building up. Then we had a “reality check” to the car market (and may other markets). I would say the market is much more “normal” now.
Q. Are any models selling more than others? In other words, if there was one car you could sell all day long, what would it be?
Wertman: We’re extremely active in the Porsche 356 market and I’m happy to report that four-cams and SCs are really hot right now.
Harris: Good British roadsters are always an “easy” sale, but I would say that Lotus Elans are the most in demand, with a very limited supply. They are the iconic British roadster and still a delight to drive, even by today’s standards.
Lichty: Those Cadillacs, Oldsmobiles, Lincolns, Imperials, plus any low-mileage, extra-clean example of almost any category can always find a new home. High miles and rust or rust repair is the kiss of death; we avoid both like the plague. We find Corvettes especially fickle. One will be high and two low. The guys who really know what they are doing with them seem to be OK, but I think ’Vettes are dangerous to deal with for dealers who don’t specialize in them.
Q. What do you see happening in the next year?
Harris: I think the market will continue to grow, albeit, very slowly. I think that British and other European sports and race cars have more of a worldwide appeal than American muscle cars, and the market in the next year should reflect this.
Lichty: I am optimistic about 2011 in a big way. I think you will see strong auctions and strong private and dealer sales as well. I have one concern right now, and that’s the cost of diesel fuel. At the time I am writing this it is nearly $4.00 per gallon. The last time that happened, interstate shipping of classic cars was hurt badly. Prices are already up by nearly 50% on quotes from the big carriers, and the little guys are almost as bad. If we continue to see diesel fuel that high, it will be bad news for the shipping companies and sellers of old cars as well, because the cost will get out of hand. Let’s all cross our fingers that doesn’t happen.
Wertman: I think we’ll continue to enjoy a healthy market in all price categories and possibly see a decrease in the number of million-plus-dollar transactions at auction. I won’t be surprised when a greater number of these transactions are conducted privately.