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It's the annual Barrett-Jackson classic car auction in Scottsdale, Arizona, and the big-top sales pavilion is crammed with aficionados, from first-time buyers to big-ticket collectors who have flown in by private jet. Cutting through the buzz of the crowd with the sweet thunder of 450 horses, Lot 655 rolls onto the block, a sheet-metal siren basking in sun-bright light from myriad overhead spots and a TV camera crew. With a 454-cubic-inch engine, this immaculate blue 1970 Chevrolet Chevelle LS-6 convertible—one of only 18 of its kind—represents American muscle-car design at its damn-the-torpedoes best. The room crackles with excitement as the bidding rises sharply, fueled by the auctioneer's rapid-fire patter. The hammer comes down at $105,000—a new record auction price for the car.

After years of idling, the market for collectible cars has revved up again, buoyed by a record economic expansion and hefty stock-market gains. Fueling the increase in sales is a new generation of mostly middle-aged collectors. "The first collectible car most people buy is from the decade before they graduated from high school," observes veteran collector Gordon Apker. No wonder high-performance cars from the late fifties to early seventies have become one of the hottest categories in the field. Objects of countless adolescent reveries, these are dream cars delayed but, with adult affluence, no longer denied. And they embody the glory days of fire-breathing Detroit iron, before the advent of soaring gasoline costs and cars with all the personality of a lug nut.

But it's not just muscle cars. One indicator is the Barrett-Jackson sale, which takes place each January. Reflecting the resurgent market, this year a robust 78 percent of the 800-plus vehicles consigned were sold, with total sales topping $23 million. In addition to 2,000 registered buyers, more than 140,000 people paid to check out the cars, auto memorabilia, and related products spread across the fabric-clad show halls and surrounding grounds. It's a festive four-day binge for autoholics, with echoes of an Old West tent revival, medicine show, and cattle auction.

The Barrett-Jackson sale presents an Alfa-to-Zimmer parade of cars of distinction, from a 1934 Packard Super 8 coupe roadster to a 1999 T-REX custom hot rod: from obscure marques to Lincolns, Chevrolets, and Mercedes spanning six decades. "We selected the cars in the sale this year from four thousand that were offered to us," says Craig Jackson, Barrett-Jackson's president. As usual, celebrity-owned vehicles garnered special attention: Elvis Presley's 1972 Lincoln Continental Mark IV sold for $48,000; a 1991 Lamborghini Diablo gullwing built for Malcolm Forbes (in a color he called "money green") went for $127,000; home-run king Mark McGwire's 1991 Porsche brought $56,000; and a Boyd Coddington-designed 1933 Ford hot rod owned by Nicholas Cage fetched $77,500. Besides the 1970 Chevelle, record prices were paid for a 1956 Chevrolet Bel Air convertible, which sold for $82,000, and a 1948 Tucker Torpedo sedan, which went for $315,000. (All prices quoted are less the six percent buyer's premium; sellers pay a commission on a sliding scale of six to ten percent, or four to eight percent on cars without a reserve, or minimum price.)

Yet while prices for American muscle cars, hot rods, and postwar European sports cars are up significantly, those for ordinary prewar American and European classics tend to be steady or soft (for instance, Packards without custom-made bodies). "The only disappointment at the auction was some of the big American classics, but they tend to sell better privately," notes Jackson. "In addition to the muscle cars, 1950s American convertibles sold very well. Ferraris were strong, as were almost all the European sports cars." Examples of the latter included a 1957 BMW 507 that went for $272,500 and a 1963 Mercedes-Benz 300SL roadster that fetched $225,000. "The cars that brought high prices were all phenomenal cars," he adds. "Today's collectors don't want to buy a half-good car and fix it—they want to start with the best."

Jackson and others in the field agree that this market is strong, but blessedly free of the infamous excesses of the eighties, when collector cars became investmentvehicles. In a fit of Greenspanian "irrational exuberance," prices escalated sharply, goosed by media reports, loose lending, and sellers' hype. They especially soared after the October '87 Wall Street crash, when money was poured into cars, art, and other tangible assets. For a time it seemed that any desirable car could be sold quickly for a fat profit. The height of automotive mania was the Ferrari craze, stoked by the death of Enzo Ferrari in 1988, which saw 1962-64 Ferrari GTOs (of which only 39 were made) selling for $10 million and up. Thenthe music stopped—collector car prices sagged broadly in 1990, and, in some cases, plummeted by as much as 70 percent in 1991.

After languishing for much of the last decade, values for good collectible cars are moving up again. That $10 million Ferrari GTO could have been had for around $3.5 million in 1994; it would sell now for $7 to $8 million. A 1960s Aston Martin DB 5 convertible that brought around $340,000 in 1990 could have been bought for $95,000 in 1992. Today it might fetch $150,000, 50 percent more than a year ago. "Some of the prices are not as high as in the late eighties, but they're more logical," observes David Gooding, the former managing director of Christie's International Motor Cars in Beverly Hills. "Some cars are worth less now, but some are worth more, and with good reason. Buyers are paying more attention to considerations like originality, history, and provenance."

"You can't use the late eighties as a benchmark," states Ed Fallon, Barrett-Jackson's director of select sales. "Cars were pushed beyond their true values. Buyers today are better informed and more realistic." Former Los Angeles Times publisher Otis Chandler, who keeps his collection of 65 cars and 125 motorcycles in a 50,000-square-foot museum in Oxnard, California, concurs. "In the early eighties, when the market started to go crazy, serious collectors like me sat on the sidelines and watched people buy cars on speculation," says Chandler. "Some of that has returned, but today most serious buyers are in it for the long haul." Rob Myers, of the Canadian auction firm RM Auctions, Inc., also agrees. "This market is not about speculators," he says. "It's really the true collectors who are buying now."

The performance of global financial markets remains a major factor. "Historically, when the stock market hiccups, real estate and collectibles prosper," notes Apker. Case in point: In August 1998, with world markets reeling from the economic meltdowns in Asia and Russia, impressive results were racked up by three collector-car auctions held on the Monterey Peninsula in conjunction with the Pebble Beach Concours d'Elegance, the most prestigious automotive beauty pageant in America, if not the world. The sales—conducted by Christie's, RM Auctions, Inc., and Brooks U.S.A.—sold some 253 cars for more than $30.5 million, more than double the amount realized in the previous year's auctions. More tellingly, the average price per vehicle was $120,000, up sharply from $79,500 in 1997.

Like currency, collector cars have their own global market. Major collectors can be found in Europe, Latin America, the Middle East, Australia, and Asia. (After paying big prices for cars and artwork in the late eighties—and taking big losses on them in the following lean years—the Japanese are buying again, albeit more cautiously.) But the largest number of collectors and collector cars can be found in the United States. "At the top levels it's a very small world," remarks Don Williams, one of its big wheels. At the beginning of this year, he and partner Richie Clyne took over the car collection at the Imperial Palace Hotel on the Las Vegas Strip and put those cars and others on sale in what he calls the world's biggest showroom, the hotel's 100,000-square-foot exhibition space. "We follow the auctions and hear about almost every private sale," he says. "There's only a small supply of great cars in the world, and they are worth the same everywhere. We know where they all are and what they'll go for."

In this clubby world, many dealers are also collectors, and some are auctioneers and/or events organizers as well. Williams and Clyne stage twice-yearly auctions in Las Vegas; RM Auctions, Inc. also maintains a substantial inventory for non-auction sales. To some extent auctioneers and collectors can function as market-makers, raising interest and prices for certain categories with widely publicized sales and show awards. But ultimately, say those in the trade, prices reflect supply and demand. "We don't make markets," insists Gooding. "We try to anticipate them and above all to present the cars in the best light. If you get great cars, the buyers will be there."

Encompassing all sorts of cars, from cosseted "trailer queens" to deceptively alluring rust buckets, auctions are a crucial part of the market. Collectors, however, have mixed feelings about them, and many of the best cars change hands privately. "The vast majority of collector cars aren't sold at auction," says Williams. "Auctions are phenomenal for many cars. But many of the people who buy the rarest, costliest ones don't want the world to know they're buying them or what they paid. Often the record prices are set privately." Veteran Beverly Hills collector Bruce Meyer agrees, adding, "My preference is to buy directly from the owner, so that I can have time to do research and to drive the car. That being said, I have bought at auction because many times that's where some of the choicest cars can be found."

Good vintage cars can be found in specialty showrooms around the country, some of which also offer new, limited-production cars that may be among the collector cars of tomorrow. (Even Barrett-Jackson features a selection of top-drawer, fixed-price cars at its sale and in its year-round showroom in Scottsdale, Arizona, for those averse to bidding.) At its showrooms in La Jolla and Beverly Hills, Symbolic Motor Car Company emphasizes limited-production sports and racing cars, from prewar Alfa Romeo racers to late-model Ferraris. They are also a factory-authorized dealer for Lotus, Rolls-Royce, Bentley, and Panoz. In addition to hard-to-find, limited-production new cars such as the BMW M5 and the Ferrari 360 Modena, Beverly Hills Auto Collection offers what owner Andy Cohen refers to as "the most desirable collector cars for under $100,000, either totally restored or low-mileage, original-condition cars, from the 1950s or later—cars that have held their value in the past and will do so in the future." The examples he cites include: 1949-1970 Cadillac convertibles, 1965-1970 Shelbys, 1961-1967 Jaguar XKE roadsters, 1965-1968 Mustang convertibles, and Porsche cabriolets from the mid-fifties to the mid-sixties. Like most dealers, Cohen will act as a broker. If he doesn't have the car a buyer wants, he'll try to locate it.

Quality Control

The question is, then: What is a great car? "It's a low-production car that was among the best of its day and is highly sought after now," says Alex Finigan, private-sales specialist for Paul Russell and Company, a top automobile restoration firm and classic car dealer located in Essex, Massachusetts. Beauty, performance, and rarity are essential criteria, while cars that were inexpensive when new tend not to appreciate greatly over time. "But rarity and desirability are two different things," cautions Fallon. "A car may be one of a kind, but it's not valuable unless it's a car people can get excited about. That involves factors like condition, history, originality, quality of restoration, and who the owner is."

But while demand has been growing, finding the cars can be difficult. "The supply of desirable cars is not meeting the demand. Any dealer will tell you they're trying to buy inventory now," says Fallon. "Currently there's not a Bugatti Royale or Ferrari Testarossa or GTO for sale," comments Williams. "There are only two Bugatti Atlantiques in the world, and you couldn't buy either one for $10 million in today's market. Of the forty-four existing J-12 Hispano Suizas, you can buy a lesser one for three or four hundred thousand dollars. For a really beautiful one, you'd probably have to pay $3.5 million, but none are for sale. Rare Bugattis and Hispanos are like prime real estate. Someone in the world will always want them. Great cars stay great. And if you buy a great car intelligently, the downside is limited."

Certainly the market's resurgence has been led by the most desirable cars of each kind, with a trickle-down effect to comparable cars that may have been overlooked. "Mercurys from 1949 to 1951, like the one driven by James Dean in Rebel Without a Cause, can bring twice what later ones do," says Apker. "Instead, someone might want a more affordable 1952 Mercury with the same flathead engine and performance."

Affordability may not be an issue to mega-rich collectors, but "the market is frequently driven by entry-level buyers," notes Apker. People from all walks of life are involved in the collector-car field—from home-garage hobbyists to CEOs and celebrities like Jay Leno, Ralph Lauren, and Reggie Jackson. Among the current crop of collectors are many who have made fortunes in the high-tech boom, including tycoons such as Bruce McCaw of McCaw Cellular (now part of AT&T), Tony Wang of Wang Laboratories, and former Microsoft president Jon Shirley. "There are guys who live to build and restore cars, guys who live to collect them,guys who live to show them, and guys who live to drive them," says Fallon.

The last group is growing. Collector-car races and road rallies are now more popular than ever, and it's more than coincidence that sports and muscle cars are rising in value. There are collector-car driving events around the country, every weekend from March to November. They range from 1,000-mile, highway-speed tours like the Colorado Grand, the California Mille Miglia, and Arizona's Copper State 1000 to competitive events such as the Monterey Historic Automobile Races at Laguna Seca Raceway, which take place the same weekend as the Pebble Beach Concours. The Monterey meet is the jewel of the American vintage race circuit, drawing thousands to watch grand old thoroughbreds running full throttle, like the $2 million 1958 Scarab Mk I that Wal-Mart scion Rob Walton drove to victory in 1998. Europe has its own plethora of events, including Italy's Historic Mille Miglia, France's Tour Auto, and England's Goodwood Festival of Speed. "In the past, a lot of people would buy cars only to show them," reports Rob Myers. "Today they're driving them much more. The rallies and races are an opportunity to enjoy your car and meet a lot of nice people."

It doesn't hurt that collector cars, whether driven or treated as museum pieces, can be insured by specialized carriers at surprisingly low rates—for example, around $100 for a 1965 Mustang convertible worth $10,000. Coverage is based on agreed value—you wouldn't want your show-quality roadster written off as if it were an old jalopy—and low (often 2,500 maximum) annual mileage, with no or low deductibles. "Collector cars are good risks—most are treated with great care by their owners," explains McKeel Hagerty, president of Hagerty Classic Insurance in Traverse City, Michigan (800-922-4050), who notes that his firm will insure an entire collection under a single liability charge. "We figure you can only drive one car at a time," he says. Not surprisingly, policies don't cover cars when they're running on racetracks.

There's a wide disparity in values, even for cars of the same make and model. A 1929-1937 Duesenberg Model J—for some collectors the ultimate American classic—can range in price from $300,000 to more than $3 million, depending in part on the style and quality of its custom coachwork. The record-setting Chevy at the Barrett-Jackson event sold for more than twice the $46,000 fetched by another 1970 Chevelle LS-6 convertible at the same sale. A concours-ready mid-50s Mercedes 300SL gullwing could run $300,000, while one in need of restoration is worth only $100,000.

The difference between an unrestored car and one that's show-ready is often more than the cost of restoration, which can range from $20,000 for a cosmetic upgrade to $300,000 or more for a concours-quality transformation. (On the plus side, it's easier to restore an assembly-line car today than in the past, with replacement parts from both original manufacturers and after-market suppliers more plentiful than ever.) "There are two kinds of cars worth restoring,"comments auctioneer Myers, whose company also operates a restoration shop. "Cars that have sentimental value, where money's no object, and significant cars that warrant the cost of restoration. We tell people every day,'Don't restore this car, we'll find you a perfect one for less.'"

Over-restoration is increasingly regarded as gilding the lily. "In years past, to compete in shows a car had to be better than new," observes ace restorer Paul Russell. "As owners have become more conscious of original condition and historic manufacturing practices, we see them preferring a fit and finish more in keeping with the cars as they were built, not a level of over-the-top perfection." Some experts believe originality will command more of a premium in years to come. Known for restoring heavenly showboats like Ralph Lauren's Pebble Beach-winning 1938 Bugatti Type 57SC Atlantique, Russell generally favors a standard of"as good as new, but not better." Says Russell: "A lot of owners like the comfortable, old-baseball-mitt feeling of a less-than-perfect car. We're happy to maintain a car like that and keep it drivable without restoring it."

As emblems of freedom, romance, history, mobility, and personal taste, collector cars carry an undeniable emotional charge. But the decision to buy one should be more than subjective. "I'm always surprised when new buyers with a passion for a particular car don't take the care to research it," Otis Chandler says. "They stick up their hand at an auction and buy a car that may not be worth the price." Even normally cool heads can get caught up in a heated bidding battle. "The open bar for bidders is there for a reason," one collector observes drily.

You don't need the expertise of a concours judge to distinguish between good and not-so-good cars. At the Barrett-Jackson sale, Keith Martin, publisher of Sports Car Market magazine, leads seminars that teach bidders what to look for. "It often boils down to the quality of the paint job and the chrome and the way the doors fit," he explains. "You can learn ninety percent of what you need to know in a two-minute inspection. There should be a logic to the car. If it has a good paint job and a crummy interior, that's a warning sign. If the owner says that he doesn't know very much about the car, that he just bought it from a friend, that's a danger signal. But if he's got paperwork on the car and knows it, that's good."

As with art and antiques, higher prices encourage fakery. Big-ticket cars have been counterfeited down to the serial number on the chassis. A coupe may be converted to a convertible, in keeping with the auction axiom "if the top goes down, the price goes up." The "factory fuel injection" that can add $10,000 to the prices of some cars, particularly Corvettes, may not be original equipment. "Fakery is always a concern, but there's a wealth of information out there," advises Gooding. "If you do your homework you'll be okay. I always encourage people to call up the specialists in the auction houses. Ask them to elaborate on what's in the catalog, including additional information that may have come to light since it was printed."

For instance, only 121 of 1,375 Ferrari Daytonas built were "Spyder" convertibles, which fetch around $350,000, while Daytona coupes converted to ragtops go for $125,000; you might be very happy with the latter, but not at the price of the former. "Fakes only matter if you're paying a premium for something that turns out not to be true," declares Martin. "If a car's not misrepresented, no one's unhappy. Auction companies don't like fake cars because they get them into trouble. I think there's more vigilance than ever before. But it's always 'buyer beware,' just as if you were buying a used car off a lot."

Prudent buyers research cars by consulting various sources, among them car publications, auction-house specialists, dealers, and appraisers, always checking beforehand the experts' credentials. They also may hire someone in the trade to locate and evaluate examples of a car they desire. Before cars are auctioned, they're usually on display, and sometimes prospective buyers are allowed a chance to give the cars a good looking-over. (Barrett-Jackson provides an on-site lift and a mechanic who will inspect any car for $75.) Prospective buyers talk to the car's owner and examine the car's documentation. A serious buyer may be able to drive the car beforehand, if only around the grounds. ("You wouldn't buy a brand-new car without driving it," remarks one collector.)

Whether virtual test drives will suffice is a question begged by on-line auctions. Last year eBay purchased Kruse International, which sells more cars at more events than any other auction firm. Augmenting on-line bidding through its own Web site, Barrett-Jackson has joined with Speedvision cable channel and Hemmings Motor News to launch, which promises to be a primary portal for enthusiasts, featuring news, information, Internet-only auctions and remote bidding at traditional auctions, as well as other avenues of buying, selling, and locating collector cars, parts, accessories, and services. "On-line buyers have as much information as possible about the cars, including standardized ratings and checklists, access to our database, and a chance to ask questions before bidding," comments Jackson. "Not everyone needs to kick the tires to buy a car," insists John Kruse of Kruse International, which provides an inspection period after on-line purchases. "After all, eBay is now the largest retailer of cars in the world." But there will always be those like Keith Martin, who says, "Nothing beats seeing and touching a car, and hearing its engine run."

Whether you own one collector car or, like the Sultan of Brunei, a thousand, they are a seductive, sometimes addictive, pursuit. For at least the next couple of years, experts expect the market to remain strong, even if the stock market skids. The most common advice: Buy a car because you like it, not because you expect it to jump in value. "There are certainly better investments," admits Paul Russell. "We always say collect and restore what you love—if there's a financial windfall at the end of your ownership, that's a bonus."

Fluctuating Ferraris

With their appeal to impulse buyers and speculators, Ferraris are typically an exaggerated reflection of reality. "They're always an overreaction to the collector car market and the economy," says Ferrari specialist Michael Sheehan. A perfect example: the Ferrari 275 GTB. The last and best version, the 300-horsepower 275 GTB/4, featured four cams, six Weber carburetors, an improved drive shaft, and beefed-up brakes. "It was the last Berlinetta coupe built before Fiat took over," Sheehan says, "and the first Ferrari to combine racing performance with user-friendly features such as a working heater and, like all 275 GTBs, a fully independent suspension." Ferrari built 340 of them in 1966-68 before ending the series. The graph at right tracks the market value of a 1967 GTB/4 (below).

1990$1 million+

3020 North Scottsdale Road,
Scottsdale, AZ 85251;
480-421-6694; fax 480-421-6697;;

Beverly Hills Auto Collection
207 South Robertson Boulevard,
Beverly Hills, CA 90211;
310-854-2400; fax 310-854-2424

Brooks U.S.A.
500 Sutter Street, Suite 512,
San Francisco, Ca 94102;
415-391- 4000; fax 415-391-4040;

Christie's International Motor Cars
266 North Beverly Drive, Beverly Hills, CA 90210;
310-385-2699; fax 310-385-5875;

Imperial-Blackhawk Auto Collections
3535 Las Vegas Boulevard South, Las Vegas, NV 89109;
702-794-3174; fax 925-736-3449 or 702-369-7430;

Kruse International
5540 County Road 11a, Auburn, IN 46706;
800-968-4444; fax 219-925-5467;

RM Auctions, Inc.
1 Classic Car Drive, Blenheim, Ont., Canada N0P 1A0;
519-352-4575; fax 519-351-1337;;

Paul Russell And Company
106 Western Avenue, Essex, MA 01929;
978-768-6919; fax 978-768-3523;

Michael Sheehan Newport Beach, CS;
949-646-6086; fax 949-646-6978;

Symbolic Motor Car Company
7440 La Jolla Boulevard, La Jolla, CA 92037;
858-454-1800; fax 858-454-1890;

Vintage Car Store
40 Lydecker Street, Nyack, NY 10960;
914-358-0500; fax 914-353-2309;

Jeff Book, a frequent contributor, wrote about alfresco furniture in the July/August issue of Departures.


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