It is smart to react. It is absurd to overreact.
The problem with keeping a personal opinion to one's self rather than espousing them on the interwebs is the scrutiny and trust you receive from anyone reading your content. You can say anything you want – there are laws protecting such opinions. But, one has to be mindful of the court of public opinion – or, the personal Twitter account of the President of the United States of America.
There had been a lot of topics floating around lately. But, one set of headlines have seared through my brain with an unprecedented quizzical look. They came from auctions during Monterey Car Week.
A few friends/colleagues were on hand during that week to get a taste at the highest point of automotive enthusiasm. They witnessed motoring greatness at every turn. But, the one thing that came out of their experiences was one disturbing fact about the collector's automobile market – the proliferation of the eight-digit car.
It used to be that a car that sold at an auction for seven figures – over $1 Million – was considered astronomical. It was a territory that no one had envisioned would be possible. These prices were reserved for the most valuable and sought-after pieces of automotive art.
That is still the case, but the upper end of the market simply opened up. We are now seeing these finer pieces of vehicular art go for well beyond $10 Million.
At the RM Sotheby’s auction in Monterey, a 1962 Ferrari 250 GTO racer was said to possibly fetch up to $60-70 Million. This example sold at $48.4 Million. At the same auction, a one-off 1963 Aston Martin DP215 Grand Touring Prototype went for $21.5 Million. Five other special vehicles went for seven figures. In all, the RM Sotheby Monterey auction yielded over $157 Million in sales over two days.
A friend who was there at Pebble Beach spotted a lovely 1935 Duesenberg SSJ that was once owned by movie star Gary Cooper. That special and rare SSJ was set for auction at Gooding & Co. at Pebble Beach. Cooper's Duesenberg sold for $22 Million. The next highest sale at Gooding & Co. was just $6.6 Million, out of a $116 Million total sale.
I have never thought to see the day when an automobile would be sold for over $10 Million. That day has arrived. And, I'm not at all comfortable with it. Yet, I understand the need for the collector's market to yield such prices for rare and valuable automobiles. The fervor of the art market is now firmly residing in the collector’s vehicle arena.
It is no longer just valuable historic automobiles. Even new vehicles are catching up to these stratospheric price tags. The Bugatti Divo hypercar debuted at The Quail fetching a price of around $5.5 Million. All 40 examples have been spoken for.
If there is any rhyme or reason beyond a simple understanding of this market, I have learned to try to be immune from it. However, this inflation of values on the highest end of the collector’s and classic car market is quite worrisome. I’m afraid we have blasted through the point of no return in this segment of automotive enthusiasm.
The headlines from the Monterey Peninsula has yielded some conversations about classic car values. While acknowledging the upper end of the market, there were points made regarding the opposite end of the spectrum – the Malaise Era market. We noticed that values are starting to go up on certain era vehicles, yet there are many that can be had for under $3,000. Usually, a $3,000 vehicle spells trouble and would require a lot of work to get back into running order. This does not include the amount of work to do a full restoration inside and out.
The width of interest between collection $3,000 cars to $30 Million cars is something to examine further. In either extreme – or on other points of the map in-between – there are some shared qualities collectors have. They have passion, knowledge, and an understanding of what they are investing in. These are qualities we need to see from all enthusiasts involved in this arena. That is the best way to see why someone can spend eight digits on a rare machine that doubles as a work of art. It is also the best way to see why someone will buy a $3,000 Malaise Era classic that still runs and needs a few things done to it.
For both ends of the collector car market, if you can do it and can invest in what it takes to acquire and maintain these precious machines – you are ahead of many people in that regard. In other words: it pays to play in this sandbox.