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Correlation Between Classic Car Prices and Financial Markets

314 messages,  Last post on Sep 28, 2012 at 7:48 PM

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#295 of 314 Re: While watching Mecum [fintail] by lemko

May 30, 2012 (7:05 am)

Replying to: fintail (May 29, 2012 7:15 pm)
As long as andre1969 and I are around, there will be a demand for big V-8 RWD 1970s and 1980s domestics!

#296 of 314 Re: While watching Mecum [lemko] by fintail

May 30, 2012 (10:37 am)

Replying to: lemko (May 30, 2012 7:05 am)
There will be enough fetishists for those things to keep them above scrap value anyway. There's a contingent of Europeans who also love those cars, so you might have a little competition so long as oil doesn't run out. But, the days of 6 figure Chevelles and the like will eventually become like a weird dream.

#297 of 314 Interesting Saga of A '35 MB 500K Roadster by hpmctorque

Jun 02, 2012 (5:41 am)

From AutoWeek...
 
"German courts rule on status of rare Mercedes-Benz 500K roadster
 
RM Auctions
1935 Mercedes-Benz 500K roadster: object of desire, source of contention
 
By: Graham Kozak on 6/01/2012
  
'The saga of a rare 1935 Mercedes-Benz 500K roadster has taken yet another intriguing turn. German courts have ruled that the vehicle is the rightful property of German industrialist Hans Prym's grandchildren because it was illegally seized from Prym in 1945.
 
Frans van Haren can't be too happy with the ruling. The Dutch businessman and vintage-automobile enthusiast paid $3.76 million for the car at the 2011 RM Monterey auction, only to have it impounded in March when he attempted to exhibit it at the Techno Classica Essen. He now stands to lose both the car and the millions he spent on it.
 
The top-of-the line 500K, one of only 342 built (of which 29 were roadsters), was purchased new by wealthy German industrialist Hans “The Zipper King” Prym. Whether obtained legitimately or claimed as war loot, the car left Prym's possession in 1945 while he served a war-related prison sentence.
 
The car was then shipped to the United States, where it was owned by a series of collectors. It even spent time in the auto collection of the Imperial Palace casino in Las Vegas for a while before turning up for auction last year at Pebble Beach.
 
The $3,767,500 that van Haren forked over for the Benz was below the $4 million to $5 million preauction estimate published by RM, but considering the trouble that ensued, it's hard to call the purchase a bargain.
 
By bringing the car to Essen, Haren unwittingly exposed his magnificent Mercedes--back in its home country for the first time in nearly seven decades--to immediate seizure (or repatriation, depending on one's perspective) by German authorities. German law dictates that the 30-year statute of limitations that would normally make the vehicle immune to seizure is only in effect while it is physically in the country. Since the car spent its postwar years in the United States, the 30-year period began only when the car was returned to Germany. Upon its return it became eligible for impound.
 
There's no word on whether Haren plans to contest the court ruling or whether he has any grounds to do so.' "

#298 of 314 Re: Interesting Saga of A '35 MB 500K Roadster [hpmctorque] by fintail

Jun 02, 2012 (7:48 am)

Replying to: hpmctorque (Jun 02, 2012 5:41 am)
I'd hope that anyone with so much money to throw around would smart enough to be leery of anything that was caught up in the rampant looting in Europe by both sides, before and after VE-Day, whether it be art or anything else. Documented prewar and postwar ownership in the same hands would be the only way to go. I will say I am not disheartened to see Germany putting a foot down about the war booty.

#299 of 314 From Current New York Times Online... by hpmctorque

Aug 26, 2012 (8:32 am)

Buy High, Sell Higher
   
"INVESTMENT GRADE Ferraris like the 400 Superamerica and 365 GTB/4 have outstripped gold in returns.
   
FOR solid financial returns, gold seems nearly alone among investments that are legal — and fathomable — to those of us who are not bankers. Gold’s performance over the last five years has been overwhelmingly positive, its price per ounce more than doubling since 2007.
 
But the skyrocketing prices of certain Ferraris built from the 1950s through the 1970s have in some instances made gold’s gaudy rate of appreciation look like a passbook savings account at the neighborhood bank branch.
 
'People who have been in the collectible automobile market and originally bought for the love of object are now looking at it as a diversification tool and a strategic part of a well-organized investment portfolio,' Claiborne Booker, an independent financial consultant based in Virginia, said.
 
Certainly, Ferraris are not the only vintage vehicles whose values have outstripped inflatiand conventional investments, but they have been one of the most reliable market indicators among collectible automobiles. And their sales at auctions are closely followed, so there is a reliable track record on which projections can be based.
 
Examples of impressive returns can be found in several Ferraris consigned to the auctions that took place here in the days around the Pebble Beach Concours d’Élégance. Gooding & Company of Santa Monica, Calif., offered a rare 1962 Ferrari 400 Superamerica Coupe Aerodinamico, one of only about 14 built by the coachbuilder Pininfarina, each car individualized for its first buyer. No two were precisely alike in their details.
 
That car was offered with Gooding’s presale estimate of $1.75 million to $2 million; it sold for nearly $2.4 million, including buyer’s premium. The same car sold nine years ago at a Barrett-Jackson auction in Los Angeles for $432,000. That represents a $2 million return in less than 10 years, a period that some investors consider a lost decade.
 
Perhaps those results could be attributed to good luck or great intuition. But the timing of the buyer in 2003 could scarcely have been better: shortly after the red Superamerica was purchased, prices for the model began to rise, indicated by sales of other Superamericas: a $560,000 sale of a similar car in late 2005, followed by a jaw-dropping $1.6 million sale in Pebble Beach in 2008 and culminating with a $2 million sale at RM’s Monterey auction last year.
 
The year-over-year difference between this year’s sale and the one last year is an impressive $400,000. Condition, ownership history and the circumstances of the sales are all influencing factors in the price, surely, but the trend is still unmistakable.
 
Later, higher-production Ferraris like the 365 GTB/4, commonly known as the Daytona, have also seen increases in price exceeding that of gold over the same period. The Daytona was one of the last models whose development was influenced directly by Enzo Ferrari. They’re brutish, exceedingly handsome and quite fast even by today’s standards; with a top speed of 172 m.p.h., the Daytona was the fastest production car available for much of its time on the market.
 
RM Auctions of Chatham, Ontario, offered two Daytona coupes this year, a black 1973 model and a bright yellow 1972. The yellow car had a relatively active auction history over the last decade. The same car was offered at a Bonhams auction in Massachusetts in 2003 where it failed to sell on a high bid of $97,000. Six years later, Bonhams once again offered the car, this time at its auction in Carmel, Calif., where the seller again declined the high bid — which, at $210,000, was more than double that of the last time out.
 
This year, the presale estimate for the same car was $375,000 to $475,000. The third time across the block was clearly the charm, and patience paid off: the yellow Daytona sold for $396,000, while the more staid black car went for about $30,000 less.
 
The impressive returns have not been limited to Ferraris and other rare European exotics. Following Carroll Shelby’s recent death, there were an unusually large number of Shelby automobiles offered in Monterey.
 
There were predictions of a Shelby feeding frenzy, but in reality the market seemed to have taken Mr. Shelby’s death at age 89 into account quite some time ago. Even so, over the last 10 years, the most collectible Shelbys have done quite well.
 
For instance, RM’s auction here included the sale of a 1965 Shelby Mustang GT350 R, a rare competition version of the GT350, for $990,000. Three years ago, in the depths of the recession, Russo & Steele sold a similar car in Monterey for just $396,000. In 2003, RM Auctions also sold a GT350 R for $206,700.
 
To maximize the return on a Shelby, however, one’s timing had to be astute —either getting into the market in the early part of the last decade or buying after a recent, but apparently short-lived, correction. It should be noted that at the prerecession height of the market in 2007, these cars were trading for prices near what the RM car brought.
 
Just as gold has had its share of peaks and valleys, so have collectible automobiles. Ferraris in particular have had periods of considerable volatility.
 
According to Michael Sheehan, a Ferrari historian and dealer, the market has imploded twice in the last 30 years or so. The first time was in 1979, and then it happened again — spectacularly — in 1990 after a sharp downturn in the stock market, coupled with the bursting of the Japanese real estate bubble, began a slide in the Ferrari market. By 1995, some models lost 75 percent of their value.
 
'There’s no sign of an imminent bubble burst in the current market, but most people don’t realize that some Ferraris still haven’t regained their 1989 highs,' Mr. Sheehan said.
 
Naturally, this raises questions about the wisdom of buying a classic automobile for its investment potential — after all, there are storage, maintenance and insurance costs to consider — rather than the pleasure that ownership brings.
 
Drew Alcazar, founder of the Russo & Steele auction house, said in a telephone interview that he had witnessed three previous boom periods in the collector car market before the current one.
 
'Some of the really big cars eclipsed high-water marks from a few years ago that we didn’t think would return this soon,' he said. 'While there are without question certain cars that are blue-chip cars, if you wake up tomorrow to find that what you paid XYZ for is now worth five bucks, but it still puts a smile on your face, then you’re doing things right.'
 
'You should do your due diligence and then buy what you like,' Mr. Alcazar said."
 

#300 of 314 Re: From Current New York Times Online... [hpmctorque] by MrShift@Edmunds HOST

Aug 26, 2012 (8:34 am)

Replying to: hpmctorque (Aug 26, 2012 8:32 am)
What people have to realize about articles like this is that they are talking about very VERY scarce objects, not '57 Chevys.

#301 of 314 Re: From Current New York Times Online... [Mr_Shiftright] by hpmctorque

Aug 26, 2012 (9:25 am)

Replying to: MrShift@Edmunds (Aug 26, 2012 8:34 am)
Agreed, and it says nothing about the average collectible. At least '57 Chevys are in relatively high demand, while still being affordable to a wide segment of collectors. But how about, say, a (non-convertible) '57 Dodge, Mercury or Rambler? Not much pricing power over scrap for these, I presume, unless they happen to be the rare example in immaculate condition.

#302 of 314 Re: From Current New York Times Online... [hpmctorque] by MrShift@Edmunds HOST

Aug 26, 2012 (12:57 pm)

Replying to: hpmctorque (Aug 26, 2012 9:25 am)
they'd have value but it would be rather stagnant value.
 
Making money on cars as investments is like playing the stock market to make money---you have to have a pile of cash and you really have to know what you are doing. It's not a game for beginners.
 
Also, a rare Ferrari in bad condition can cost a frightening sum to make right.
 
One thing the article doesn't mention is that very rare cars can be counterfeited. you might not think it'd be worth it to fake an entire automobile, but if $5 million bucks is at stake, and you have a VIN plate, you can have everything reproduced by craftsman. After all, many of these cars were made by hand in the first place and many parts, like engines and frames, were originally fitted from far more common "related" cars made in greater numbers.
 
Always beware of a rare car that suddenly "appears" with no prior history.

#303 of 314 The New 54.5 MPG Mandate by hpmctorque

Aug 29, 2012 (6:50 am)

Will the mileage standards that were just introduced eventually affect the supply and demand for collectible cars? If so, how? My guess is that it'll have a long-term effect, simply because it'll result in a decreased supply of the cars we and young people of today know, and the cars the next generation will know. I believe that some effect will be seen before 2025.
 
Please see News $ Views for a broader discussion about the new mandate.

#304 of 314 Re: The New 54.5 MPG Mandate [hpmctorque] by MrShift@Edmunds HOST

Aug 29, 2012 (7:41 am)

Replying to: hpmctorque (Aug 29, 2012 6:50 am)
Well these "mandates" have little to do with what *actually* happens in the real world. They are goals that are easily avoided.
 
the biggest obstacle to the future of collectible cars is, I think, that nobody will want the cars we produce today, with the exception of a few rare birds and some of the limited production high HP models.

Messages Page 31 of 32

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