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From the WSJ


A Rough Ride in Collectible Cars

For some, the first sign of trouble was a Daytona Spyder.

When one of these rare early-1970s Ferrari sports cars turns up at an auction, high-end collectors typically bid aggressively, even fiercely, to acquire it. But at a recent sale in California, one Spyder failed to fetch the minimum bid.

In recent years, the vintage car market has soared, led by the priciest European models. But now, as the economy worsens to the point where even the wealthiest collectors feel pinched, demand for million-dollar sports cars is starting to skid.

[SB122756427131254233] Sean Smith, Courtesy of Gooding & Company

1956 Mercedes-Benz 300SL coupe

Dealers, auction-company executives and others in the business acknowledge the downturn but say that, until recently, it has mainly affected the low end of the market: cars costing up to about $100,000, many of them American models. And while some insist that Ferraris, Mercedes-Benzes and Alfa Romeos are still holding their value, an increasing number of sellers are looking to unload their cars in a hurry to raise cash after losing their jobs, or a large chunk of their wealth in the stock-market plunge, say car auctioneers and others.

Recently, two of Michael Sheehan's clients came to him looking to sell their Ferraris in a hurry -- an unusual request. "They needed cash now," says Mr. Sheehan, a longtime Ferrari broker in Newport Beach, Calif. The cars, a $110,000 1982 Berlinetta Boxer and a $950,000 1972 Daytona Spyder, wound up selling for about 25% less than they would have sold for just a few months ago.

Both sellers themselves were in hammered industries: One was a home builder from Chicago, and the other a former Lehman Bros. executive from New York.

Mr. Sheehan says he and others saw it as a bad omen when the Daytona Spyder failed to sell during an annual weekend of car shows, auctions and racing events on California's Monterey Peninsula in August. The event attracts some of the most sought-after cars and well-to-do collectors, and sales this year included several record prices.

Surprisingly, though, there were four Daytona Spyders -- which are sleek, shapely two-seat convertibles -- up for sale this year by three auction companies. That's considered too many for a car of which only about 120 were made. While one sold for about $1.5 million, two others sold for between $1 million and $1.1 million. The fourth failed to sell because bids fell short of the reserve price.

"Monterey was the swan song," Mr. Sheehan says. "Since then the Ferrari market has fallen 20% to 30%."

[A Rough Ride in Collectible Cars]

There were other signs of trouble at the summer auto auctions. Mike Regalia was at an auction in Pebble Beach, Calif., in August when bidding began for a Porsche that once belonged to actor Steve McQueen. The auction house's estimate was $125,000 to $175,000, though Mr. Regalia, a Sun Valley, Calif., collector who also restores vintage cars, says he thought it would fetch at least $200,000. After all, collectors have paid outlandish sums recently for the late actor's property.

Bidding on the Porsche slowed just above $100,000.

"I realized that the car wasn't going to get anywhere near the number I expected," he says. So he wound up bidding $125,000 and taking the car home. "I hadn't planned on bidding, but I kept thinking, 'These people must be asleep,' " says Mr. Regalia.

Or maybe they just ran out of money. Amid the broad economic deterioration of recent months, spending on extravagances like antique cars has slowed. In many cases, people can no longer afford even to keep their collections, says David Gooding, president of Gooding & Co., a Los Angeles car auction house.

In the past year, many collectors who used home-equity loans or other credit to buy the vintage convertible or muscle car of their dreams have had to sell as the housing and credit markets have declined. The same factors have kept new collectors from entering the market. As a result, many staple collector cars like 1957 Chevrolets, 1940 Fords and 1960s Pontiac GTOs are selling for half what they commanded two or three years ago.

According to industry tracker CNW Research, long-established classic cars are also suffering. The price of a 1934 Packard Touring is down 17% on average, compared with two years ago. The 1957 Ford Thunderbird is down 15%, and the 1940 Ford DeLuxe Coupe is down 40%.

Market watchers are bracing themselves for the next big round of high-end auto auctions in Scottsdale, Ariz., in January -- long a collective barometer of the market's condition. Some fear that these auctions may disappoint, much like this month's New York contemporary-art sales by the Sotheby's and Christie's auction houses. The Sotheby's sale totaled $125 million, well below the low estimate. The Christie's sale brought in $113.6 million, or about half the low estimate. At both auctions, about a third of the lots failed to sell.

For some collectors, the downturn could be a good time to amass a long-coveted vehicle or two -- not just because prices are often lower, but because cars that weren't for sale before are suddenly available. John McCue of Half Moon Bay, Calif., bought a 1958 Mercury Park Lane last summer for $39,000. The 61-year-old retired software executive says it probably cost him about 5% less than the car's value a year earlier. But since he has pursued the car for years, he knows the former owner wouldn't have sold it then.

"There are those cars that you think will never be for sale, the ones the owners will take to their graves," he says. "Well, now a lot of those cars are changing hands."

While many in the collecting business say there will always be enough wealthy people who want vintage cars, others fear the market could be headed for a repeat of its last crash in 1989, when speculators who had no particular interest in vintage cars drove a steep, if fleeting, run-up in prices. Today, more of the buyers are car lovers, but speculation underpins their motives as well.

"The love of cars never outweighs the love of money," Mr. Gooding says.

Write to Jonathan Welsh at




Collectibles - Part 3

We want to thank The Colonel for taking the time to share his thoughts with us, and you.

Q- What is the most important priority when it comes to collectibles.

A- Simple, which cars turn on the passion, the adrenalin, get the thought process going, fire up the imagination, that is the highest priority. The car has to fire up the passion, if not its just a hunk of old metal for you.

Q- Don't stop....!

A- Once you decide which cars get your passion going, then you create a mental picture of how you would like this car, you will probably not find it, unless you are looking for a restored original. The idea is to find a compromise that meets most of your parameters for a particular car. You might also learn from the person that restored or modified this car.

Q- What a person feels "inside" is the highest priority?

A- From my perspective its a resounding YES.

Q- How about money, price, and other considerations?

A- Contrary to regular vehicles, collectibles do not depreciate. Similar to real estate there might be price bubbles for certain models. There is an overall appreciation of collectibles. Keep in mind that there are a limited number of these vehicles. Technology makes it seem as if they are at every corner, its not the case. The beauty of these transactions, the seller does not have to sell, and the buyer does not have to buy.

Q- Other considerations?

A- If you love cars, start getting involved with collectibles. Its a fascinating aspect of the automotive business, and best of all the vehicles appreciate instead of depreciate in value. Do it for the fun, the enjoyment, the satisfaction, the passion.

Q- Colonel...anything else?

A- These cars are to enjoy, have fun, relive a different time frame. The physical and mechanical aspects are important. Keep in mind that seeking perfection in cars that were not perfect when they were new, can be very expensive, and somewhat counter productive. Seeking a sense of satisfaction, fun is the gratifying aspect of these cars. Enjoy and have fun, get involved, thinker with the cars, its all part of the experience.

Q- Closing comments?

A- I would have several, the most obvious is that many people go through an intense intellectual process when it comes to collectibles. The higher the intensity of the process, the less its fun, the more it seems to be intellectual mud wrestling. Its supposed to be fun, make it fun, make it enjoyable, make a decision, get a collectible, have fun.




Collectibles - Part 2

The Colonel is sharing his thoughts, and opinions on collectibles, keep in mind that its The Colonel's opinion, and we welcome your opinion. Leave us a comment its the easiest way.

Q- Walk us through an example of what you mean?

A- Lets take Tri Five Chevy's which are benchmark cars. The most valuable are the completely restored, fully original cars with the most factory options, and number matching. Clearly if you would have one of these cars you would not drive it, it would be in a controlled environment. You would like to experience what a Tri Five is all about. You would get a car with a small block, a 4 speed, or 3 speed automatic, that was redone back in the day, and still looks and feels that way. It might have a few patches in the floors, its not perfect, its not rotted out, and it looks and feels like a Tri Five, its got the patina, its got the flavour, its got the character. You can drive this car, enjoy it, and experience a 50 year old car. 

We continue from yesterday...

Q- What about muscle cars of the late 60's early 70's.

A- Its the same principle, a documented Hemi Cuda is a priceless car that stays in a controlled environment, a Cuda with a 440 or 383 is a driver that will give anyone a feel for what a hot Mopar was all about almost 40 years ago.

Q- You could elaborate for every muscle car?

A- Yes its easy, especially that I remember most if not all of these cars, we could make a long list of numerous interesting cars. If one wants a car to keep in a controlled environment its get the most original, best restored, most documented car, and finding the rarest is not a bad idea either. Looking and drooling over a car is one thing. Experiencing a car is a different mind set with different requirements.

Q- Experiencing a car?

A- Yes experiencing a car...its easy if you have a mental image of a car then you would derive satisfaction and gratification from experiencing your mental image of the car. Which is exactly what these old cars permit you to do. At the same time if the car is too modified you lose the time frame reference point of the car.

Q- Define a few experiences.

A- Back to out Tri Five example. Take a restored 55 or 56 Chevy Belair with a 265 Power Pack, and a cast iron 2 speed Powerglide, this car would give you the experience of what a new 50 year old Chevy is / was all about. For a multitude of reasons these are compelling cars. Then you take a 210 post that started life with a 235 six cylinder, and a 3 speed manual or the same Powerglide. This car has a small block V8 with a 4 speed or 3 speed automatic, and is an old school car. This is the driver that still has an identity, personality, and patina of an old car, it might have a little bit of this, and a little bit of that which makes it unique. These 2 cars still give the "old car experience" which is what it should be.

Q- What would a resto mod be like.

A- This would be the Killer Shoebox Chevy....ideally a 55 or 56 210 post coupe steel body, with an aftermarket frame, Corvette brakes, suspension, a 6 speed manual transmission, and a 572 race version. Although this car would be exciting, it would not have the feel or character of an old car. The experience would be completely different, the parameters would be different.




Collectibles - Part 1

Lets continue....

A- What about clones or re creations.

Q- The upward price surge of certain cars opened an opportunity to create a model that did not originally come from the factory as a new car.

Q- Can you give an example?

A- A car started life as a Chevelle Malibu 2 door Hardtop, and its re created as an SS396. This is just one example. 

Q- Why would anyone want a re creation?

A- Its affordable, driveable, and enjoyable, the same owner could have a documented SS396 with a 375HP motor in a climate controlled environment which is rarely driven since its a valuable car. He could have a re created SS396 with a 502 that he drives and goes to cruises.

Q- Is it just a question of value?

A- Primarily value, but also driveability and enjoyment.

Q- What are resto mods or pro tourers?

A- Its taking a re creation to the next level or next few levels, its a modern car made to look like an old car, or an old car completely redone as a modern car. You can redo a Tri Five Chevy with modern car running gear, suspension, brakes as an example.

Q- What would you suggest?

A- I prefer a driver quality car that still has the feel of the original, it does not have to be number matching, but it does need to have the feel of the original. The car needs a patina of an old car, it needs a sense of identity and relevance to its time. How shiny were the paints 40 years ago? How well did the body panels fit? How was the fit and finish?

Q- The car has to fit its time.

A- Yes the car has to fit and depict its time frame. A 50 year old car has certain characteristics of its time. A 40 year old muscle car has qualities of its time. This is my opinion and my suggestions, being mindful that we are all different individuals.

Q- Don't stop keep on going!

A- Everyone talks about how its been restored, the condition, the work, this is important, but on a driver quality car that one will use and enjoy, the feel of the car takes precedence. If its basically a good car, it becomes a question of what will this car do for you when you drive it, when you experience the car.

Q- Could it be that people get confused?

A- I would not say confused, they are well informed, often its not clear what they want to achieve with the car, and more important how this car will give them a sense of satisfaction.

We will continue.....




Last month we acquired several driver quality collectibles that we offered for sale. Needless to tell you, these cars created a robust level of interest, numerous inquiries, and excitement. Yes, we had fun.

The Colonel got involved, and expressed his thoughts and opinions on a few occasions. We think its appropriate to have The Colonel share his thoughts.

Lets get started....

Q- Colonel what are your thoughts on collectibles?

A- I have all sorts of thoughts on collectibles, everyone that is into cars should have a collectible, to bring back memories and life events.

Q- What sort or kind of collectible should one have or get?

A- Its simple, whatever car or truck fires up the emotions and passion, since we are our own individuals different collectibles appeal to different people.

Q- There is such a wide spectrum and variety, how does one make or start getting a sense of direction?

A- Most people want a car that they can drive, enjoy, in most instances this is a driver quality car, its not perfect, and its not a project, its in the middle, and priced accordingly.

Q- Could you be more specific?

A- An individual should do a comprehensive review of why they want a collectible, and what they want to do achieve with this collectible. Especially that these cars are not  daily transportation. From an investment perspective in most cases these cars will not depreciate, and in many instances they will appreciate in value.

Q- After the review?

A- Usually its the middle of the road driver quality car, most folks want to drive and enjoy these cars, the emotional satisfaction is a high priority in acquiring a collectible. At the same time if something untoward would happen to the car it would be upsetting, but not the end of the world.

Q- Its also an ideal course of action to start?

A- Absolutely, get a driver quality car, to enjoy and maintain as a hobby, then progress to a high quality collectible with provenance, and documentation which is seldom driven what is called a "trailer queen". Start with a car that is driver quality then progress.

Q- What is all this talk about number matching, and date coding.

A- A collectible with the highest value is a completely original car as it left the factory, these cars have the highest value, and will most probably experience the highest appreciation. These cars have extensive documentation to substantiate their originality.

Q- What makes a driver quality car?

A- This is a good car, that has been restored either frame off or cosmetically and usually slightly modified. It does not have an original engine or transmission, and does not have extensive documentation. 

Q- Can you give us an example?

A- Take Tri Five Chevy's, the most recent is a 1957, which is a 50 year old car. There are a myriad versions of these Chevy's most are modified in one fashion or another, the exception are completely original and documented as being completely original.

Q- How about the muscle cars of the late 60's?

A- We easily forget that these cars especially the one's with the high horsepower engines, were usually put to good use by the original owner when they were new.

Q- What do you mean?

A- Take a Chevelle SS396 with the 375HP version of the motor, and a 4 speed with 3.73 or 4.10 rear axle ratio. The motors were high strung with mechanical lifters that required constant tuning. Forty years ago what would an owner do with such a car? Yes, they would put it to good use...need we say much more. Some of these cars were rare when they were new, if used chances were good that the motor would have an "incident" at one time or another. Back in the day it was not about number matching, it was about how fast? The Chevelle with the 325HP automatic transmission had better odds of being a number matching car.

A- The truly rare cars with provenance are almost priceless?

Q- Absolutely, any high horsepower muscle car that is documented as completely original commands a high price. Most folks are aware of these high profile cars, and of the price of these high profile cars.