The classic car market remains well off its highs in terms of prices reached at its peak in 2014, but it has found stable footing over the past three years.
While the ‘average’ blue chip cars like the 275 GTB Ferrari, the Mercedes 300SL Gullwing /Roadster and DB4 /5’s still are 20% below peak values, the very rare cars with racing history continue to make new highs. With the world awash in cheap available money, collectors are not afraid to break new records in terms of prices achieved when the right car comes along. The best of the best continues to attract serious money. Tom Hartley Jr confirms this saying, ‘the market is still strong for the very best of anything’.
Last year a 1956 DBR1 Aston Martin sold for $22m which was a new record for a British car. A rare alloy body 1959 Ferrari 250 California Spyder sold for almost $18m (only 8 alloy were made). These are big numbers- even if the cars are very rare. I continue to see this trend in 2018. The best cars will attract serious money as the collectors fight for the very best, but the broader market will not be as strong. As Simon Kidston says for 2018, ‘the best sells and the rest sits it out’. I could not agree more. I see the scissor widening between prices of the best cars and rest of the market. The same is happening with the vintage watch market, the art market and any collectable asset class. With so much money circulating, collectors are doing the only right thing: they are buying the best and will pay virtually any price to secure it. I have always argued that this is the Nr 1 rule in collecting: you cannot overpay for a trophy asset.
In terms of what collectors are buying, I continue to see a trend towards more modern classic cars of the 1990s and supercars of the 2000, a trend I noticed last year already. Kidston argues, ‘Buyers stay the same age so in real terms what they buy gets younger every year’. What he means by that is that the buyers are not getting older as new buyers are constantly coming into the market at the same age or younger and de facto the cars they buy keep on getting younger as they buy the era of cars they remember and lust after.
The auction houses are noticing this trend of course and adapting to a shifting demographic. Porsche continues to be very strong (remember the Porsche mania in 2016), as their cars are drivable and speak to a current generation of 40 year olds who want rare 964 and 993 variants that are usable on a daily basis. RM Sothebys is offering one of the best 964 Porsche collections ever to hit the market in Amelia Island in March 2018.
As long as the world economy remains stable and no major financial correction is coming, the classic car market should hold up. But chances are rising that a major financial correction will come. Then all bets are off and even the rarest trophy assets come up for sale at discounted prices. Those that can take advantage of that with sufficient liquidity will be the winners.
(Main picture is a 1958 Ferrari 250 GT Cabriolet series one being offered by Gooding later this month. Credit Mathieu Heurtault for Gooding & Co).
A short comment on the most important cars being offered at Arizona and Scottsdale later this month.
One problem I see currently in the collectable market is the following; collectors over the past decade have bought the best assets and are sitting on them. Therefore, it is a struggle for auction houses to come up with excellent supply. I see this problem in art, classic cars and vintage watches. It is increasingly hard for auction houses to find trophy assets that collectors want. Having said that – I am impressed what the auction houses of Bonhams, Gooding and RMSotheby’s have secured for the upcoming auctions. Here are my personal favourite 5 cars coming up for auction in January:
First Bonhams is offering the very first Mercedes 300SL Roadster from 1957 that was shipped to the US. As you know Max Hoffman urged Mercedes to build a Roadster for the US market and thus the very first roadster to be sent to the US (it was the fifth 300SL Roadster ever built) is quite a special car. The car received an almost half million dollar restoration and thus the estimate of $1.4-1.7m reflects its importance and condition. Bonhams star lot must be the 1958 Porsche works 550 Spyder with racing history (raced at Le Mans 24hrs and Nurburgring 1000km) and is offered at $4.5-5.5m.
Gooding has also strong cars including a 1965 Ferrari 275 GTB that was the personal car of its designer, Batista Pininfarina. While it features several one- off items and is unique in many ways, at the end of the day it is a 275 GTB with a 6 carb engine. In my view the car is worth maybe a 30-40% premium to a normal 275 GTB – so at best a $3.5-4.5m car and not the astronomical estimate Gooding has put of $8-10m. My top choice at Gooding would be the 1958 Ferrari Series 1 250GT Cabriolet. These are extremely rare cars (only 40 have been built) and I love the fin tail-lights that the Italians took over from the American designers. The color of this car is superb in original Grigio Conchiglia* (Shell Gray) with red interior.*It is my dream to own a classic car with red interior one day. I would pay blindly up to $6.5m for this car all in (estimate is $7-8.5m). My last choice would be the red 1956 Jaguar D-type from Gooding. Even though RM Sothebys is offering a more important D type in terms of racing history, I think the red color on the Jaguar D type is perfect, and best of all, it is original. The car left the factory of Jaguar with this superb red color. I would buy this car just for the original red color.
I promise you – you won’t see another one anytime soon.
*(Credit Mathieu Heurtault for Gooding & Co).
