Auction experts offer buy-sell-hold advice
By Larry Edsall
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When asking for advice about what classic car to buy, collector car enthusiasts often are told simply to buy what they like. In other words, just buy a car that has personal meaning -- perhaps the car they wanted but could not afford back in high school or a car they will enjoy driving and taking to local car shows.
And yet, through the years, classic cars have proven to be pretty decent investments that can increase significantly in value, so you can't blame people from seeking expert advice on what to buy, what to hold, and what to sell.
Hagerty, the world's largest insurer of classic cars, hosted an inaugural Global Auction Summit at the Penske Racing Museum in Scottsdale during Arizona's annual January classic car auction week. The summit featured a panel of experts from eight major auction companies, including two based in England.
After answering various questions about the state of what is a hobby for car collectors but an industry for companies involved in restoration, insurance and auctions, each panelist was asked what car to buy, what car to hold, and what car to sell.
Cars receiving BUY recommendations included the Porsche 356, fun-to-drive and still stunning to see XK-E Jaguars, "gullwing" Mercedes-Benz 300SLs -- while they still can be had for less than $1 million -- but also increasingly popular (and now apparently only slightly less expensive) 300SL roadsters, and earlier coach-built Ferraris from the era when Enzo Ferrari was in his prime.
Mitch Silver of Silver Auctions suggested the 1966 or even 1965 Pontiac GTO "Tri-Power" convertible and 1953-55 Oldsmobile, Buick or Pontiac convertibles. Donnie Gould of Auctions America by RM noted that the 1966 Shelby Mustang (with a four-speed manual transmission) costs about half of what a '65 model brings, but is basically the same car and thus is a great buy.
The experts said to HOLD the cars that bring you the most enjoyment, and also to hold muscle cars, which have slipped some in value in recent years but figure to make a comeback.
What to SELL? Clones, re-creations and "tribute" cars. Why? "It may have been your dream when you built it," said Simon Hope of Britain's H&H Classics Unlimited. "But don't expect it to be someone else's."
Drew Alcazar of Russo and Steele said he considers clones and tributes to be what he calls "title in the glove box" cars. He explained that these are cars the original owner may enjoy, but at some point he or she needs to simply park the car at the side of the road, say "well, I've had my fun," and walk away. In other words, don't expect your re-creation to create big monetary rewards when you offer it at auction.
One other category of cars which have been fairly hot in the market in recent years but were consistently rated as a SELL by the experts was 1955-57 Ford Thunderbirds, the first-generation, two-seat cars. Except for those '57 models equipped with superchargers, the experts said there are so many of these "baby 'birds" available that you can sell yours with confidence that should you ever change your mind, you'll easily be able to replace it at a reasonable price.
Gullwings (and roadsters) take flight
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If you were among those seeking to buy a classic 300SL – gullwing or roadster – during Arizona auction week, you needed a little more cash than expected because prices were up on both versions.
Although it wasn't the biggest-dollar sale of the auction, perhaps the most remarkable bidding at RM focused on a 1955 Mercedes-Benz 300 SL "gullwing" coupe. The car's pre-auction estimate was a substantial $700,000-$800,000. But with bidders from Europe and the Middle East going at it, the hammer didn't fall until the price had climbed to $1,375,000, a record amount for a steel-bodied Mercedes gullwing.
The day before that Mercedes sold, Drew Alcazar of Russo and Steele participated in a panel discussion and suggested it was time to buy gullwings before they hit the million-dollar mark.
So, was the gullwing at RM the new standard for what has been the gold standard of international car collecting, or was it merely an anomaly? The classic car market experts say we wouldn't know until the next three sold.
And sell they did:
At RM, a '54 brought $544,500.
At Russo and Steel, a '55 went for $704,000.
At Gooding & Company, a '56 got $858,000.
Granted, the quality of the cars varied, but considering that coming into Arizona, excellent gullwings were typically considered to be in the $650,000 price range, those totals were more than just good.
And it wasn't only the much heralded gullwings. Mercedes 300 SL roadsters did extremely well, too. In fact, they went for what had been considered gullwing- like prices:
At Gooding, a '62 roadster (an unrestored car with very low mileage) brought $951,500, and a '60 model went for $627,000.
At RM, a '60 roadster sold for $572,000.
Arizona auctions recap
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The prices paid for those 300 SLs typified the strength of the classic car auction market we saw in Arizona, where nearly 2450 cars and $160 million changed hands (those totals include the five long-time events, as well as the new Motoexotica and GRG events held earlier in the month, but do not include the one-day "Last Chance" auction Silver has scheduled for Saturday, January 29, at the Fort McDowell casino and resort).
The highest priced sales reported were:
1. 2006 Ferrari FXX Evoluzione, $2.09 million at Gooding
2. 1949 Ferrari 166 MM Barchetta, $1.87 million at RM
3. 1933 Packard Twelve Sport Phaeton, $1.76 million at RM
4. 1953 Fiat IV Supersonic, $1.705 million at Gooding
1970 Plymouth Hemi 'Cuda convertible, $1.705 million at Russo and Steele
6. 1930 Duesenberg Model J LeBaron Dual Cowl Phaeton, $1.485 million at Gooding
7. 1965 Ferrari 275 GTB, $1.43 million at Gooding
8. 1955 Mercedes-Benz 300 SL Gullwing, $1.375 million at RM
9. 1929 Duesenberg Model J Dual Cowl Phaeton, $1.2375 million at RM
10. 1967 Ferrari 275 GTB/4, $1.155 million at Gooding
Barrett-Jackson, which sold more than half of all cars sold (1240) of those cars, had total sales of some $69.7 million. But once again, the highest price paid at the auction wasn't for a car, or even for an historic airplane. It was $742,500 for a trifecta that includes a 44-foot custom catamaran off-shore power boat, a trailer to carry it to and from the water, and a matching 2008 Chevrolet Corvette Z06.
Gooding totaled some $34.9 million in sales, RM did $30.6 million, Russo and Steele $21 million, and Silver was at $3.4 and counting.
While Barrett-Jackson and Gooding totals improved by several percentage points compared to their 2010 events at the same venues, RM's sales total represented a better than 50-percent boost over its 2010 Arizona sale, and while storm devastation prevented Russo and Steele from reporting a 2010 sales total, its 2011 total represented a 22-percent improvement over its 2009 auction. Russo and Steele also reported one of the top-5 individual vehicle sales of the month.
According to Hagerty Insurance, which monitors auction action and shared its car sales data even before the auction houses reported their official figures, the average price per vehicle sale figures for the Arizona auctions were:
Russo and Steele, $31,259
Sell through rates were:
Barrett-Jackson, 100 percent (the auction was held on an all no-reserve basis)
RM, 95 percent
Gooding, 93 percent
Russo and Steele, 61 percent
Silver, 55 percent
Auction actions heads to Florida
And now, the auction action shifts to Florida, at Kissimmee, where Mecum stages its annual auction January 26-30; at Fort Lauderdale, where Auctions America by RM has a March 4 event; on Amelia Island, where Gooding is scheduled March 11 and RM on March 12, with the annual concours d'elegance that same weekend, and at Palm Beach, where the Barrett-Jackson event runs April 7-9.
Also in Florida is the fifth annual Boca Raton concours d'elegance, February 25-27.
Click here for event calendar.
Click here for more articles by Larry Edsall.
Fiat Supersonic Photo by Pawel Litwinski (c) 2010 Courtesy of Gooding & Company