Stephen Serio, a Waltham, Massachusetts classic-car dealer, expects the 1966 Ferrari 275GTB on his lot to sell for about $810,000. Five years ago, the same car sold for $500,000.
“When you have something they’re not making any more of, the value goes up,” said comedian Jay Leno, host of the Jay Leno Show, who has a collection of 105 cars, including 8 Duesenbergs, and 90 motorcycles. “If you’re knowledgeable, you’ll probably end up making money.”
Prices on collectible cars have gained about 60 per cent since September 2006 according to an index created by David Kinney, publisher of “Hagerty’s Cars That Matter,” a pricing guide and Website. His Blue Chip index of 25 vehicles tracks actual sales and includes automobiles such as the 1960 to 1963 Ferrari 250 GT California Spyder, which has gained 112 per cent since September 2006, and has a current book value of $4.2 million.
Collectible cars have beaten art, wine, stocks and gold, which is up 30 per cent since September 2006. The Art Market Confidence Index at Artprice.com has fallen 37 per cent from a year ago and is down 69 per cent since September 2006. The WinePrices Fine Wine 100 Index dropped 38 per cent between April 2008 and January 2009, and the Standard & Poor’s 500 Index has declined 24 per cent over the past three years.
“It’s an addiction, a passion,” said Guy Anderson, 56, a Georgia collector. “We all make sacrifices to have these cars. You can’t have just one. Each car does something different.” He rents buildings around his Woodstock, Georgia, home to house his 15-car collection, which includes a 1965 Abarth Simca race car.
A 1953 Aston Martin DB 2/4 Coupe sold at the Gooding & Company auction in Pebble Beach, California, in August for $1.65 million, more than triple some pre-auction appraisals of about $500,000, said Serio, the Massachusetts dealer. The last time the one-of-a-kind vehicle was available, in 2007, it sold for $887,000.
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“That car just blew the roof off the market,” Serio said. “Everybody in the car world was looking at each other and saying, ‘Are you kidding me?’”
Television has helped fuel market boom, said Ford Heacock III, president of Heacock Classic, a collector-car insurance company. The Speed Channel, a unit of News Corp, has been expanding coverage of auto auctions since 2002. Bidding under cameras and lights gets people excited, Heacock said. Transactions among private parties are generally priced well below auctions, he said, a flaw most pricing guides don’t account for.
“There’s a lot of glitz and glitter. It’s hard not to get mesmerised. The whole industry is driven by passion,” Heacock said.
Some collectible cars, such as the ‘57 Chevy, have declined, said Richard Lentinello, editor-in-chief of Hemmings Motor News, a collector-car publisher in Bennington, Vermont.
The most-desired cars such as Italian-made Ferraris and Bugattis and have held up very well, Lentinello said. A 1938 Bugatti Type 57C sold at Gooding & Company’s August auction for $1.38 million.
“If you’re reasonably knowledgeable and you know what you like, there’s a good chance other people will like it too,” Leno said.
Cars that were popular 30 or 40 years ago will generally remain popular today, Lentinello said. Collectors are attracted to features such as hand-made bodies, small production runs, certain types of engines, and a racing pedigree.
“All Ferraris aren’t worth $1 million to $2 million,” Lentinello said. “Some are worth only $200,000. You have to do your homework. You can get burned fast.”
Among the traps for buyers: cars that aren’t the advertised model, switched vehicle identification numbers, restamped engines, cars restored with shoddy workmanship, and cars whose most valuable production parts have been removed.
The biggest declines among collectible cars are high- octane muscle cars from Detroit’s so-called golden age: the 1967 Corvette 427 Convertible and the 1970 Plymouth Hemi ‘Cuda Convertible, down 25 per cent last year and 47 per cent over three years, according to Hagerty’s guide.
Bonhams auction house has sold 5 or 6 cars for more than $1 million in the US over the past year, and between 10 and 15 worldwide, said Rupert Banner, director of business development for the firm’s motorcar department in New York.
Cars that were expensive when built tend to be expensive now, he said. A 1933 Duesenberg Model J Torpedo Convertible once owned by William Boyd, the actor who played Hopalong Cassidy in US movie Westerns, was sold at a Bonham’s auction in Carmel, California, for $1.44 million in August.
It’s one of a very small number of cars manufactured by the Auburn, Indiana-based company in the 1920s and 1930s. Duesenbergs gained cachet from a 265-horsepower engine with a top speed of 119 miles per hour.