Like new, with full documentation
By Keith Martin
Having lived through a couple of collector car booms and busts, I can reflect on the current market from a position of experience, although certainly not omniscience. The time before the Arizona auctions seems a proper time to reflect; our own Mike Sheehan weighs in with his opinions on page 46.
As Ferraris are the bellwether market of the sports and exotic car world, let’s use them as a reference point. I believe the Ferrari market is far more educated and sophisticated than it was in 1989. Speculators aren’t snapping up F430s because “Piero Ferrari drove one last week.” (By the way, excepting lucky DNA, can someone explain to me just what qualifications Mr. Lardi, née Ferrari, has to have such a large hand in running Ferrari?)
I maintain that the “natural value” of common vintage Ferraris (those built before 1974 and in quantities above 500) in a rational market is a direct function of the cost of acquisition and the cost of restoration. In the end, these cars are commodities. They are attractive, rare by general automotive standards, and part of a company with great heritage. But historically significant on a large scale? Hardly.
THE SUM OF THE PARTS
The natural value of these cars is somewhere around 80% of what it takes to make a worn out, but not terrible car, into a good #2 example. For instance, if a tired 250 GTE (955 built) can be bought for $40,000, and it takes $100,000 to do a decent but not platinum level comprehensive restoration, then the market price should be around $110,000. And in fact, you can still buy a decent GTE for that amount, up from the $60,000 they were stuck at for a decade.
Daytonas (1,273 built) were too cheap from 1991–2005 at $125,000, and are reasonably priced today at $225,000. Values of similar, common vintage Ferraris are all floating upward from their decade-long doldrums, as they should be.
On the other hand, significant blue chip Ferraris, which combine historical significance, racing success, and low production numbers, are judged by different criteria. The cars that come most often to mind are the TdF (90 built) and the SWB (approximately 165 built). It now takes at least $2 million to buy a steel-bodied SWB with no stories, more than double what they cost two years ago. And their values are soaring, not floating.
Because just as a Picasso is worth more than its oil and canvas, an SWB speaks to the important values of car collecting in a significant manner. In other words, the whole is worth far more than the parts.
Which is why I have to agree with those who say the muscle car market is due for a “correction”—a polite way to say it’s about to fall off a cliff.
For instance, there is no question that a six-figure price for a mass-production car like a 1970 Chevelle SS LS6 (4,475 built) is simply not supportable over time. While the styling is pleasing, it is not groundbreaking. The straight-line performance from its 450-horsepower V8, with 0–60 in 6 seconds and the quarter-mile at 13.8 seconds (97.5 mph), is impressive. But what are you going to do with it—run a vintage rally a quarter-mile at a time? And they just built too many of them—in this case, more than three times the number of Daytonas. Consider, if Daytonas were a hard sell for a decade when the market just didn’t care, how hard will it be to move Chevelles when the thrill is gone?
And the world is starting to figure this out. Dealers have already told me that prices of garden variety 1969 Z/28s (20,302 built, more than 20 times the number of Daytonas) are falling: buyers who paid $80,000 six months ago would gladly take $60,000 today.
With the exception of a few rare cars, such as 1970 Hemi ’Cuda convertibles (14 built), I predict that the prices of serial production muscle cars, built in quantities above 500 units, are going to fall at least 35% in the next year.
Clones will fall much further—50% or more—because once the music stops, buyers will realize that a fake is a fake is a fake. Frankly, I’d rather have a Beck Spyder (one of my least favorite cars) than a six-cylinder Dodge Challenger into which someone has stuffed a Hemi V8. At least with the Beck you can actually have some fun going down the road.
The successful collector in 2007 will not be swayed by mass-market, multi-media hysteria, but will seek out models that have limited production numbers and historical significance. For those who think the muscle car bubble will last forever, chances are their previous investments include Peanut the Royal Blue Elephant Beanie Babies and Lucent Technologies. Indeed, Dot.Con: The Greatest Story Ever Sold, by John Cassidy, might prove to be interesting bedtime reading before the auctions.
LOOKING FOR A FEW GOOD SCMERS
We recently received the following letter concerning Wagon Ho!, the journey of our 1968 Colony Park Wagon from Ann Arbor, MI to SCM world headquarters in Portland, OR:
I live in Rapid City, SD, and subscribe to SCM. I’ve also driven between Rapid City and Bozeman many, many times. (I’m a dedicated fly fisherman, you see.)
I seriously considered helping you and SCM out by taking your Colony Park along this route. But I am right now sitting in a dark closet (with my laptop) until this ridiculous feeling passes.
Driving a 1968 four-door, rear-wheel-drive sofa…’er boat…450 miles over three mountain passes in a Rocky Mountain winter most certainly isn’t my idea of fun. Now if you offered instead a new Mercedes 4Matic or perhaps even Bill Harrah’s old Ferrari V12-powered Jeep Wagoneer, I might have taken you up on your request.
Good luck to the masochist you finally convince to take this leg of the journey!—Scott Zieske, via email.
Scott, what’s the fun in asking a car to do something it was actually designed to undertake? Watching a hippo swim is one thing, teaching it to tap dance like Fred Astaire is another. Contrast the excitement in watching a 4Matic cruise serenely across a snow-covered landscape, versus observing our CP Wagon wallow like a pig in slop up the slightest of slightly slick hills.
But we’ll let the Car Wimps win this one. Let’s get the wagon headed south, a vehicular swallow migrating to Arizona. SCMers, show your colors, your virtues, and your usually irrelevant common sense by steering the SCM Wagon south and away from the twin evils of snow and ice.
Contact Colony Park route choreographer Paul Duchene (firstname.lastname@example.org) and tell him just how far south and/or west (at this point, any movement is good) you’ll take it. Time is of the essence. We’ll even throw in a free copy of SCM’s Guide to Vintage Wagons, when and if we print one, to every participant.