By Keith Martin of Sports Car Market
It’s auction-mania time again for the collector car world. With five world-class auctions in one week, and over 1,000 collectible cars making their come-hither sounds to eager bidders, the Monterey stage is set.
Last year we saw a major rebound in Monterey, as overall sale totals jumped from 2009’s $120m to 2010’s staggering $172m—a 43% increase. And the velocity of high-end sales has only increased during the ensuing twelve months.
At a time when typical investments in real estate and the stock market are challenging at best, hard assets, such as art and collector cars, provide a tangible place to park funds—and a potentially rewarding one if current trends continue.
And continue they will, I predict. There is enormous liquidity amongst the super-rich, Baby Boomers are entering their “gotta have one now” phase of collecting, and new millionaires and billionaires are minted daily in emerging countries like China and India.
The number of collector cars is not increasing, while the number of collectors who can afford them is. This puts an inexorable upward pressure on prices.
How Much Should I Pay? Don’t go to Monterey looking for bargains. You’re going to be in the midst of a school of sharks—sharp-eyed bidders who rarely let any tasty underpriced morsel get by them. You’re better off searching Craigslist if a super-low price is all you are after, although you won’t find many ads for Duesenbergs or Mercedes 540Ks there.
Come to Monterey looking for great examples of desirable cars—and prepare yourself to pay above market for them. If you’re contemplating spending six, seven or eight figures, do your homework. Hire a marque specialist to research the specific car or cars you are interested in, talk to the auction companies, and even arrange a test drive if possible.
Finding out that a car you bought isn’t what you thought it was can turn into a very expensive love-fest between lawyers as seller and buyer grind their way to a position of mutual agreement. Know what you are bidding on beforehand, and save yourself this kind of misery.
Be prepared to pay top dollar and then some for exceptional cars with bulletproof credentials. All it takes is two wealthy collectors—who both want the same car badly—to send the bids through the roof. And that will happen in Monterey, as it is where the best cars cross the block.
If you’re hunting for a very rare, very special car, amounts paid in the past may not reflect current market values, which are being set in the very room you’re in. After all, you and all the other bidders have come to Monterey hoping to bag the big one and bring it home. So, if you happen to get the Duesenberg you’ve always wanted in your sights, don’t let a few tens of thousands of dollars keep you from putting it into your collection. This year’s high price might be considered a bargain price next year.
* Mandatory field.