Last post on May 24, 2002 at 6:15 AM
You are in the Classic Cars - Archived Discussions
This discussion is ARCHIVED. To reactivate the discussion, post a request in the Lost In The Town Hall... discussion.
What is this discussion about?
May 21, 2002 (8:14 pm)
We've been talking in some of the threads about what influences the value of collectible cars.
There's an interesting article in the current issue of Money about how the factors that influence the value of collectible violins might be used as universal rules to gauge the value of collectibles.
For what it's worth, here they are:
Age and rarity are not the source of value.
Brand name matters.
Value can change in an instant, without warning.
Value is shaped by perception--and perception is not free of personal prejudice.
When the world changes, the value of an object may change--even if the object itself remains exactly the same.
Anyone care to comment? In a way none of this is new information. Shifty's been saying a lot of this, and anyone who buys and sells for a living should have an intuitive sense of these things.
May 21, 2002 (9:32 pm)
I think the points made are generally pretty valid except for one:
I don't think value changes *drastically* in an instant, without warning. It can change (and certainly has in the case of say old Ferraris, and wickedly downward) but this took 3-6 months to establish itself as a downward trend and at least a couple of years to bottom out.
Cars aren't like stocks in this regard. They do not "plunge" but they most certainly can decline. Usually this is due to speculation by people who are not devoted collectors. For a while, Ferraris were being bought by "investment groups" as a kind of automotive mutual fund. It got pretty weird.
May 22, 2002 (1:38 pm)
I think the emphasis on brand is important. It explains why LS-6s sell for $85k or so. You've got a whole bunch of brands with powerful "franchises" as they say:
Chevy. Chevelle. 454. SS. LS-6.
Plus the whole "pavement ripping big block" thing and the idea that 1970 was the peak for musclecar performance.
I think the idea that value can change drastically comes not just from the stock market but from the particular market the article covered. A recognized expert had challenged the authenticity of an especially valuable Stradivarius and since documentation is sketchy on 400 year old violins without serial numbers this had affected the value of the violin. I suppose the analogy could be made to cars that are basically just one fender of the famous car they're described as, or to a car with a valuable provenance that's challenged.
May 22, 2002 (1:52 pm)
Oh, I see what you're saying--on an individual basis. Yeah, I'd agree with that. In those cases, value could drop like a rock.
May 22, 2002 (4:22 pm)
Another analogy you could draw from the article is that collectible violins aren't valued on their tone ("performance") but on who made them ("brand").
This would be comparable to Chevies and Fords being more highly valued than other brands with similar or better performance.
I've owned plenty of Chevies but it never ceases to amaze me how people will do handsprings over Grandma's 350 Chevelle and completely ignore a 400 Gran Sport.
Does this happen to a certain extent with the Italian exotics? Are Ferraris uniformly superior to Masers and Lambos or is it the Ferrari "franchise" that boosts value?
May 22, 2002 (5:17 pm)
I think in the Ferrari's case they are superior because Ferrari has such an awesome racing record, whereas Lamborghini never raced and Maserati hasn't raced in many many years.
So a Ferrari really is a real race car built for the street, and in this sense it is unique among all cars. I think this was proven recently when a big time auto magazine specializing in modifying street cars (Sport Compact Car Magazine) fielded some ten radically and superbly customized and highly modified cars against a stock Ferrari 360 and the Ferrari beat them all. Some were a bit faster, some a little more this and some a little more that, but when all the categories for judgment were added up, the Ferrari outscored them all. So all the king's horses and all the king's men couldn't quite build a Ferrari no matter what.
May 23, 2002 (8:52 pm)
Today I was looking over the shoulder of a guy at work as he was looking at 442 convertibles for sale on the net. He was also running across a few Cutlass SX convertibles, a car that Olds (like a number of car markers) put out around 1970 to get around the insurance surcharges that were helping kill the musclecar market. These were cars that could be ordered with the same engines and appearance options as the musclecars but didn't have the musclecars' lousy track record with the insurance companies.
Anyway one of the ads said something like "extremely rare, only 357 built" and the seller was asking a 442-like price. My friend was impressed by the rarity but thanks to Shifty's constant coaching I was able to point out to him that rarity doesn't mean anything. The bottom line is that no one grew up wanting an SX and no one ever wrote a song about SXs. I think there is a song about 442s, believe it or not.
May 24, 2002 (5:39 am)
It's the old story -- "somebody has to care" for anything to have substantial value.
#9 of 10 Right, collectible value comes from ...Collectors
May 24, 2002 (5:47 am)
May 24, 2002 (6:15 am)
But from real collectors...people who actually buy are the ones who determine the market, not the ones who try to tout what they already own.