Two years ago, the art market had cratered, with both Sotheby's and Christie's suffering huge year-over-year declines in their annual New York sales.

But on February 3, the market spoke with an authoritative voice, as "Walking Man I," a life-size bronze sculpture by Alberto Giacometti, was sold by Sotheby's for $104.3m, a world record for the most expensive work of art ever sold at auction.

Sotheby's total for the evening was $235.6m.

To put that in perspective, the combined Arizona total of Barrett-Jackson, Gooding, RM, Silver, and Kruse was $126.5m. Add that to the 2009 Monterey totals for Gooding, RM, Bonhams, Russo, and Mecum, $119.8m, and you have $246.3m. Sotheby's sold 31 lots to get to their total, the automobile auction companies sold 2,280 cars to get to theirs.

The single most important element that sets the art market apart from the collector car market is that of uniqueness. Especially with paintings, each work is one of one. It would be as if there were only one 250 Ferrari GTO, or one Ford GT40.

In fact, what drives the pricing differential within, for example, the 250 GTO family are items of singularity. This GTO won the MOST races, making it one of one with that provenance. This Ford GT40 WON AT LE MANS in 1966, making it one of one with that as a part of its history.

As you move down the pecking order of valuation, each variance from "the best of the best" reduces the market appeal of a car. Let's look at race cars. Not a factory team car? Knock. Won races but was crashed heavily, with many parts replaced? Knock. Didn't win anything? Knock. Was a backup car and never raced? Knock. Finally, the least valuable would be a racer built as a "continuation car" after the initial run ended.

Who cares?

I am often asked why it makes a value difference if, say, a 1963 Corvette Split-Window doesn't have its original engine, but instead has a period-correct one (one that was built during the same time period as the chassis, so might conceivably have been installed in the car in which it now resides).

The answer is simple. Collectors are always looking for reasons to value one artifact higher or lower than another one. This differentiation has led to an entire army of appraisers, valuation experts, web sites, and even magazines like this one.

Functionally, having a replacement 327-cubic-inch, 340-horsepower engine built in 1963, even if not the one originally installed in a car, makes absolutely no difference to the performance of the vehicle. (And if we want more performance, we can always install a later "crate engine" that incorporates modern technology-but improving the performance of vintage cars is an entirely different topic, and opens an entirely different can of worms.)

Let's price a 1963 340-hp Corvette coupe, completely correct with a decent older restoration but without any Bloomington Gold or NCRS paperwork. It should bring around $60,000. Take the same car and replace its original engine with a period-correct one, not different in any way besides the engine stamping, and you can take at least $10,000 off the asking price.

My retail sources tell me that once the engine is no longer the engine that came with the car-whether the engine is period-correct, a restoration restamp (that's a fancy word for fraud), or a properly installed crate motor such as a ZZ4 with aluminum heads-the value doesn't change much.

Evidently, the Corvette world falls into two categories: completely correct and documented, at a premium price; and correct in every way but the engine, at a secondary price point.

In this issue, Mike Sheehan writes about the buying and selling of two 250 GTOs, where the best-in-the-world GTO sold for a record-breaking $26m, and the same seller bought a GTO with a lesser history and more stories, in the market-correct $16m range. In effect, the seller/buyer
exchanged quality of provenance for $10m, and reportedly used the difference to buy a passel of vintage Ferraris. In fact, this "lesser" GTO will still get the owner into all of the exclusive GTO events the more expensive car did, so all he has lost is bragging rights.

Shine over grime

As we have noted before in SCM, the trend in collector car valuation is away from pretty and toward correctness and authenticity. But let's not be too quick to drink our own patinated Kool-Aid here. I would suggest that the old car market at large still prefers shine to grime, and fresh paint to faded.

A large part of owning a collector car is the head turning it causes when you drive down the street, or pull up at an event. If you show up in an unrestored Maserati 3500 GT, at least 90% of an assembled audience is going to wonder why you don't replace the crappy old weathered paint job on your otherwise cool car, and give it some eyeball sizzle. Trying to explain to the casual car fan that a lackluster preserved car is really preferable to a fluffed and buffed restored one is a hopeless cause.


This issue is devoted to Scottsdale, with our exclusive hands-on coverage of the auctions, plus John Draneas's insightful look at the insurance issues that are surfacing in the aftermath of the Russo and Steele wind-driven disaster.

As I went from auction to auction, I found a sense of confidence in the bidders that was missing a year ago. There was a sense that the market found its bottom last year, and that the new prices for cars are going to stick. There is still plenty of money around for best-of-the-best cars, and there is still no money around for the clones and fakes that shone so briefly three years ago.

If you have avocational money to work with, I would suggest this is a very good time to buy the best quality merchandise you can. You'll get more usefulness out of your investment if you buy documented correctness rather than never-touched originality-you'll pay less, be able to drive more, and get more kudos from the gang.

But if you are ready to move to a more thoughtful level of collecting, with all the pluses and minuses that entails, a no-stories original is what you should be looking to put into your garage, and what will ultimately have the highest long-term value.

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