When I walked into an enormous, nondescript warehouse in an industrial part of Northridge last Friday, my brain simply could not process what lay before me.
The e-mail had only said there would be a dozen cars there, maybe a couple more. Instead, I was instantly met by a Tucker Torpedo, a 1931 Rolls-Royce Phantom, an olive Aston Martin Zagato DB AR1 and tons more stunners. And that was just in the foyer. Creep around to the back and there were hundreds of classics from every era and every country, sparkling in pristine condition as they awaited their upcoming turn on the auction block.
These cars are all headed for new owners in the near future, being prepped by Auctions America for their trip to the California Collector Car Auction in Burbank in a few weeks or the Monterey auction hosted by parent company RM Auctions in about a month. I tried to wrap my head around the prestige and history and beauty of everything from the Ferrari 365 GTB/4 to the Fiat 500 Jolly and its whimsical wicker seats. They had an Edsel Citation. They had a Muntz Jet. They had two (2) Isettas! It was heaven.
But all I kept thinking was, "God, I hope the market doesn't crash."
Because classic collector cars are accruing value at, frankly, an alarming rate. The market is shooting ever skyward by the day, exemplified by recent sales that draw unbelievable sums like Fangio's $29.6M W196R to the more recent $52M 250 GTO, and another 250 GTO coming up in Carmel next month that could fetch even an higher sum.
"In 1997, if you did $5 million, that was really monster," RM Auctions specialist Vinnie Mandzak told me for an autoMedia.com article I wrote. Last year at Monterey alone, RM pulled in $125 million. They expect to top that total this year.
You can read the rest of that article here.
Mandzak also said that he's seen 20-25% growth on some cars, just in the past year. The wealthy are turning to collector cars in droves because they represent a fantastic investment opportunity, and that sounds exactly like what happened during the spectacular rise and fall of the classic car market in the late 80's and early 90's. It would be a shame to see that happen all over again.
Everyone says that things are different this time, though, and there are signs that they're right. For instance, the growth isn't just at the top of the market. Auctions America specializes in what Mandzak calls the "mere mortal" collectors, vehicles around the $100,000-200,000 range, attracting people that have been priced out of the expensive stuff but still want to get involved. Their recently booming popularity is preventing the market from becoming too top heavy.
Another factor is that, this time, collectors are genuinely passionate about what they buy. In the 80's, fast money (and probably cocaine) fueled frantic spending sprees, often with little consideration for what they were buying or how they would use the car. That led to hoarding, and a giant bubble.
Nowadays, we still have fast money (and probably cocaine), but buyers are more selective about what they buy. Mandzak even says that most buyers are collecting with the expressed intention of driving them, in stark contrast to the last market boom. "I think they're back in love with cars," Mandzak said. It was perhaps the most encouraging thing I heard all week.