In defense of high auction results

[MarrsCars]

We have had similar discussions here before about the effects of big money auctions have on the hobby. Most often it is seen as a negative but we published an article that offers a flip-side view of the hobby and how high dollar cars actually benefit the collector and individual hobbyist. I welcome opinions of course.

In Defense of High Auction Results

[Rusty_OToole]

Do they serve free liquor at these auctions? When I see the mugs paying for tickets to get in, paying for catalogs, paying big bucks for cars plus an auctioneer's premium it makes me wonder.

[cahartley]

There have always been people with money and that won't be changing any time soon........or ever.

It's not every day moneyed collectors "trade" cars like they do at Amelia Island.

But the article is right on where is states that everything rises with the tide and that many of the cars that bring the big bucks would not ever have been affordable for us "little people" anyway.

Thankfully there are a lot of cool old cars out there that can still be bought by average collectors or I wouldn't have what I have.

I think my '25 Dodge is as stately looking as any other, much more expensive, period car and I'll always be happy I managed to get it.......

(BONUS: So does my wife.......it's HER favorite ........she calls it "The Gangster Car"....... :cool: )

[alsancle]

I have no problem with high results at auctions. Ultimately we are talking about 1/10 of 1 percent of the collector cars or less and I'm a firm believer that supply and demand works things out correctly. You see a good deal once in a while but everyone still has the right to overpay for a piece of junk and have me laugh... which leads to my next point:

Attending an auction is fun entertainment. Any high dollar auction event is roughly the equivalent of me taking one of my kids to a Bruins or Celtics game cost wise. RM, Gooding, etc do a great job managing an event - you have to give them that.

[caddyshack]

The ones who typically benefit from the high buck auctions are the auction companies, the seller, the hauler, and the tax man. The buyer will get tagged for fees, registration charges, transportation, etc., etc.. If it takes big money, so be it. But, the real losers are the everyday people that made it a hobby in the first place, and the younger generation that is squeezed out financially. The economy has everything to do with it. Just watch the foreign money flow in and watch the prized autos end up in an overseas container. I f this is the trend, then I do have a problem with it. Sorry, just venting.

[MarrsCars]

Risty-OToole: Yes, in fact they do often serve free alcohol at these events, especially if you're in the "good seats", great point! There's also the show-off factor at play, the guys who want the camera on them as they walk around a car on their phone asking their friends back home "can you see me on TV?"

Alsance: Agreed, I find auctions to be primarily a source of entertainment, and they excel at that.

Caddyshack: I have noticed trends over the decades of cars flowing one direction, into a specific country or region, but that is almost always reversed at some point, usually if a once favored marque falls out of said favor, or if a country has economic troubles, or in the case of some European countries, regulations push the cars back towards the States or wherever they came from. Today I see so many Oldtimer Mercedes cars heading back to Germany, yet some of these models weren't even readily sold there when new because their economy was in post-war shambles. They are buying the cars they could never have had, I guess much like US collectors coveting Porsche 959s today.

[alsancle]

There are zero cars at a Gooding or RM event that the "average guy" could buy so how are they pushing anybody out? It is not like they are selling 1975 Pacers for 100k.

[Rusty_OToole]

We tend to gasp at the highest priced cars and forget the rest. When you read the auction results you usually see some quite nice, but not spectacular cars that went for reasonable prices. Sometimes there are real bargains to be had, cars that went quite a bit lower than the estimates.

[Matt Harwood]

We only know about those sales because of wider media coverage and the internet today, but great cars have always brought record-setting prices. Remember when you could get a Duesenberg for $10,000? We forget that was also the time you could buy a house for $6000.

Great cars have ALWAYS been more expensive than the rest. And there have ALWAYS been guys who have been willing to pay more for them. The only difference is that they now do it in public as often as not.

There are still lots and lots and lots of affordable cars, and big money guys certainly aren't pushing each other out of the way to own them. Model A Fords have been the same price for at least two decades. My Cadillac will never be worth more than it is today, no matter how long I keep it. These "rich guys" that everyone loves to hate aren't buying up ALL the cars, they're fighting over a tiny slice of the top end of the market to buy cars that none of us ever had a chance to own anyway. They aren't driving up prices on lesser cars--this is one place where a high tide isn't floating all the boats. At every auction, there are far more screaming bargains than outrageous over-pays.

I don't understand the resentment, as if a guy making $40,000 a year would be able to own a Type 35 Bugatti if only those rich jerks would stop driving up the price and showing off.

[Buffalowed Bill]

I wholeheartedly agree with the article and with Matt's comments. There will always be some people who desire to own the best, and willing to pay the price.

With the cost of a restoration being what it is, I really doubt that very many sellers actually recoup what they have invested in their car. A fresh restoration and the value of a car at the top of the market is a fleeting phenomenon, wait too long and the value can be markedly reduced.

While it is certainly nice to own one or more cars considered to be among the best of their kind, vanity or the bottom line is not the prime reason some of us have aimed for perfection. Until about twenty five years ago having a perfect car could be really important to having a car first looked at and then recognized as historically significant. Today the story of the survival of a car has become so important, for real car people, that it may be more important then how pretty it is. Thankfully I had that mindset change at about twenty five years ago and it has greatly enhanced my enjoyment of the hobby. I began to switch my attention to the well maintained driver car and try to enjoy it while trying to continuing to maintain without major restoration and to search out the story of its survival.

Unfortunately, what its worth or how good the paint is important to hold the interest of a significant number of casual fans. The health of the old car hobby depends on interesting enough of these casual fans and then also important to educate them as to the history of a particular car and why it is ok for a car not to need it to be pristine.

There is room for both the ego driven perfectionist and the less well healed hobbyist. There will always be more then enough affordable collector cars, especially as we old-timers die off. Those in their middle years cannot help but reap the benefit from the changing demographics in the hobby, but for these affordable cars to be accepted there have to venues where they can be seen and where they can be loved for what they are rather then ridiculed for what they are not. For some it will require a mindset change based on economic and historical reality, but if successful it will allow the hobbyist to relax and enjoy what he has and appreciate what others have. It really does make life a great deal more enjoyable.

[Steve Moskowitz]

Well said guys...I personally agree. There is also another side to the story...

In large part, due to the success and notoriety of auctions we are now seeing numerous TV shows about collectable cars. Publicity is good for the hobby. Many of these shows are not to my personal taste but there are a ton of new ones being considered...I mean a ton of them! Getting TV viewers interested in our hobby is huge for us. We will eventually reach an audience we could never dream of and maybe those folks will find the many affordable cars that do go up for auction, private sale or elsewhere. This is just a side benefit.

[Scooter Guy]

I read the article. It seems to me that the whole point was that high auction prices have raised the general level of awareness for the potential value of collector cars and as a result more and more vehicles are being stored and/or preserved in some sort of future attempt to ride that wave and cash in for the benefit of the "every man" type. I'm sure that one could probably cite examples of that, but I'm not sure it's as widespread as the article implies.

It seems to me that it's just another way to spin the fact that high auction prices DO have a trickle down effect, but the part they don't really touch on is that the virtue of the very argument made in the article means higher prices for the "lesser" stuff the article is touching on. The TV effect is similar...televised auctions and shows like American Pickers drive up awareness (and thus prices) on the stuff we're after all the time though it would be hard to quantify just how much and how significant that really is.

[countrytravler]

Watching a auction in 2013. Cars not bringing big bucks. 40 Ford 40.000-you couldn't restore one for that kind of money. And the 2 Chev p/u- BUY-DRIVE-ENJOY

Examples:

Edited April 28, 2014 by countrytravler (see edit history)

[Rusty_OToole]

I would like to ask some of those guys, who complain of being priced out of the market, how many they bought when they were cheap?

I'll bet that in 9 cases out of 10 the answer is "none" followed by a list of excuses.

So, if you didn't buy the car you wanted when it was $500 or $5000 what difference does it make if it is $50,000 or $5,000,000? You aren't going to buy it anyway.

[Rusty_OToole]

Beautiful 40 Ford convertible going begging for $40,000. I will further bet that lots of guys who complain about high prices, spent that much or more for the SUV they are driving. And that SUV will be worth about $5000 after a few years where the 40 will never be worth less than it is right now, unless it is neglected or wrecked.

[countrytravler]

Beautiful 40 Ford convertible going begging for $40,000. I will further bet that lots of guys who complain about high prices, spent that much or more for the SUV they are driving. And that SUV will be worth about $5000 after a few years where the 40 will never be worth less than it is right now, unless it is neglected or wrecked.

[MarrsCars]

In large part, due to the success and notoriety of auctions we are now seeing numerous TV shows about collectable cars. Publicity is good for the hobby. Many of these shows are not to my personal taste but there are a ton of new ones being considered...I mean a ton of them! Getting TV viewers interested in our hobby is huge for us. We will eventually reach an audience we could never dream of and maybe those folks will find the many affordable cars that do go up for auction, private sale or elsewhere. This is just a side benefit.

Well said! I can add that I have several friends who are not "car guys" but can now find a way to relate to me more when I see them out socially by asking, "So do you watch that Chasing Classic Cars show?" I pick that example specifically because it really is the show most people I know ask about and watch as non-enthusiasts, Top Gear is second among them. I think Wayne Carini is probably the best role model for our hobby, and Keith Martin to a degree as well, with CCC being such a genuine and interesting show, even people who prefer non-auto themed programs like American Pickers can enjoy CCC because of his usually exciting search for these forgotten cars. I also have friends who email me regularly asking what old car (that usually means 70's to them) they should buy and submit a list of cars I may not particularly care for, but I keep my mouth closed in that respect and offer them solid buying advice and what to look for, especially as this may just start some of them down the path to collector car ownership.

Makes me wonder, does the AACA run tv spots ever? This seems like a great way to reach a new audience as you said. I know it can be cost prohibitive on the national level but local spots in under-represented markets would be far, far less costly. By that I mean stations often place their own local ads over the supplied national ads during most shows, where allowed by their syndication terms, to generate local level revenue for the stations.

[Buffalowed Bill]

Just had an a brain surge which made me want to ask what these cars that the high auction prices are being made unaffordable, are they Classics, muscle cars, 50's cars, fat fendered 40's cars, or are we talking about some of the exotic European cars? What is the magic price that makes a car unaffordable? Prices go up as people buy cars because they can't get any interest on their savings or because the cost of borrowing is inexpensive or because people see signs of an the Bull Market changing. The car market prices go up and down as the economy surges and contracts. I don't think that this is either bad or good but rather how the world economy works. The weak dollar with relationship to some of the foreign currencies has stimulated foreign sales of American and foreign cars alike. For over twenty years the street rodder has made it difficult for the stock car people to compete in some segments of the market as they seem to be willing to pay more for the good original cars and old restorations. The auctions just serve as another forum for display, no different then Ebay or Craig's List and no different then the service that Hemming's has provided for many years.

Even with high auction prices I still see only a moderate upward price movement in the market that I doubt would change any informed person's opinion on a moderately priced car's value, but I do see the publicity surrounding the auctions effecting the uninformed folks understanding of the value of some old cars. There seems to be a large number of pre War cars that have come on the market lately as their owners find themselves unable to care for them. I think that there is bound to be a ripple affect with the post War and muscle car market as the Baby Boomers begin to feel their age. Will it save some cars from being scrapped, I hope so, only time will tell. For the younger car guy patience is a virtue as supply and demand will even out and prices will stabilize, just hang in there and you will be rewarded.

[Skylark4367]

My only complaint about the auctions is that some antique car sellers try to get "auction" money for their 20-footers because they saw the same model sell for big money on television. Just because a big-block, 4-speed version sold for big dollars on a televised auction, your six-cylinder, four-door sedan with a faded paint job isn't worth $14,000 all of a sudden.

[John_S_in_Penna]

One downside of sensational TV auctions I see:

Because television tends to show the high-dollar cars,

not bothering to show the Studebaker sedan that sold for $6000,

the general public thinks antique cars are an expensive and

unaffordable hobby. Such a wrong impression can keep interested people

from looking further into an enjoyable hobby.

I have heard this many times. I make a point of telling

how affordable many antique cars are: "You can get a

nice antique car for the price of a used Ford Taurus!"

The usual reaction is, "Really? I had no idea!"

[MarrsCars]

I have heard this many times. I make a point of telling

how affordable many antique cars are: "You can get a

nice antique car for the price of a used Ford Taurus!"

The usual reaction is, "Really? I had no idea!"

I see your point but in my own experience, even back in the 1980-90's before there were televised auctions people were still always surprised when I told them what my cars actually cost me to buy, how inexpensive they were. I think just the nameplate is enough for most people to see dollar signs, but my cars were almost always something high-end when new (Jag, Cadillac) so I can't say the same would hold true for a Dodge or Chevy.

Edited May 5, 2014 by MarrsCars (see edit history)

[countrytravler]

Good buys at the Mecum Auction-Texas 2013

[countrytravler]

Edited May 5, 2014 by countrytravler (see edit history)

[Guest Henry White]

My only complaint about the auctions is that some antique car sellers try to get "auction" money for their 20-footers because they saw the same model sell for big money on television. Just because a big-block, 4-speed version sold for big dollars on a televised auction, your six-cylinder, four-door sedan with a faded paint job isn't worth $14,000 all of a sudden.

There are many who think that way, their sedan is worth about the same as the restored convertible. Just needs a couple hunert for paint, etc. Those folks watch em sink into the ground, then the heirs send it the crusher.

Reminds me of the folks who wont sell because they're "going to fix it up someday". My buddy has a good reply for them. He tells em, "no you wont, it will sit there and rust away" 95% of the time he is correct.

[540K]

Attending an auction is fun entertainment. Any high dollar auction event is roughly the equivalent of me taking one of my kids to a Bruins or Celtics game cost wise. RM, Gooding, etc do a great job managing an event - you have to give them that.

I went to a Sotheby's auction of Eric Clapton's guitars in New York in about 1998 with a reasonable amount of money to spend. After a half dozen lots sold for ridiculous sums, I just sat back and laughed. There was a guy sitting in front of me (wearing a scarf -- it was summer time -- 'nuff said) and he paid several thousand dollars for a spangly guitar strap made by Versace or such. Later a similar strap came up and I heard him tell the man next to him, "Well, I bought the other one; I guess I should buy this one, too." That was his motivation. Price no object.

I like going to the RM/Gooding/Bonham's auctions in Monterey. Great fun, and no stress since there is no danger I'm going to bid!

[540K]

I wholeheartedly agree with the article and with Matt's comments. There will always be some people who desire to own the best, and willing to pay the price.

With the cost of a restoration being what it is, I really doubt that very many sellers actually recoup what they have invested in their car. A fresh restoration and the value of a car at the top of the market is a fleeting phenomenon, wait too long and the value can be markedly reduced.

I agree with AJ's Matt's and Steve's comments. I think Bill is right too re flipping the cars quickly. There is a publication in Italy called Classic Car Auction Yearbook, and one of their chapters has graphs of sales of the same car over the years -- not the same model, the very same vehicle. They all point up. I saw a car at Pebble in 2011 that sold for $4.6M. It was already restored, but it was re-restored, changed color and was resold just two years later for $7.8M. Even with the cost of the restoration, this buyer profited at least $1.5 to $2M on a single car in a very short amount of time. Everyone keeps saying "market correction," but it hasn't come yet.

[countrytravler]

More deals.

[countrytravler]

Out of reach but neat cars. Who wouldn't want to drive these 2 cars 1 time?

69 Camaro--ZL1 550.000.00+

67 Vett--L88 3.000.000+

[cahartley]

There's a lot of truth to the old adage "Every dog has its day".........hot today.......no so hot tomorrow.

[Guest Bigg Mann]

My brother was at Auburn Indiana auction today and a 1964 Buick Wildcat estimated to bring 30,000, got in a bidding war and sold for 45,000.00.