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.

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