B-J Mini-Index Shows High Return for Collector Cars
B-J Mini-Index Shows High Return for Collector Cars Scottsdale, AZ, October 13, 2008 –- Turns out the guy driving that 1967 Shelby GT500 as an enthusiast has the side benefit of being a smart investor. Leading into the Barrett-Jackson Auction Company’s inaugural event in Las Vegas, the world’s leading collector car auction house reported that many of the top cars sold have performed better in value than the stock market and gold over the last 10 years.
“Though most people buy a collector car to enjoy, they have also proven to be one of the soundest investment vehicles in the global marketplace over the past 10 years,” said Craig Jackson, Chairman and CEO of Barrett-Jackson. “It’s rare that a hobby and someone’s passion has the potential of being a great investment.”
The Barrett-Jackson mini-index* was created in 2003 and consists of representative cars that reflect the diversity seen in the collector car market. These cars span from 1957 to 1970 and are primarily European and American sports cars and U.S. muscle cars. The cars used in the index are the 1957 Thunderbird, 1967 Jaguar XKE, 1967 Shelby GT500, 1970 Camaro Z/28, 1970 AAR ‘Cuda, 1965 Austin Healy MK III and a 1967 Corvette 427/435.
According to the data released today, the value of the cars in the Barrett-Jackson mini-index grew by a compounded annual growth rate of 16 percent from Q1 1998 to Q1 2008, which included economic and political upheaval stemming from major events ranging from the Invasion of Iraq, the Dot Com bubble crash, and 9/11. During that same period, the Dow Jones Industrial Average (DJIA) grew a compounded 5 percent annually while the S&P 500 Index grew 4 percent. The price of gold grew a compounded 11 percent in the same period.
“These numbers paint a vivid picture of the intrinsic value and growth of the collector car market,” said Steve Davis, President of Barrett-Jackson. “A financial analyst will tell you that every market has year-to-year fluctuations, but that the true measure is performance over time. We’re proud to be part of that great performance of the collector car market and we believe our expansion this week into Las Vegas will reinforce the view that collector cars are not only our consumers’ passion but offer the potential of providing long-term value. Most enthusiasts like me take great solace that as a car collector, we own tangible assets that have not only stood up to the test of time in value, but can also be driven and enjoyed.”
“With all the turbulence in the current capital markets, we are pleased with our key economic indicators for this event. Tickets sales have been strong, our Las Vegas consignment slots were sold out a month ago, and bidder registration has exceeded our expectations. Bidder interest and registration have not waned despite the negative news coming from Wall Street.”
“We are excited about the upcoming Barrett-Jackson Inaugural event,” says Scott Voeller, Vice President of Marketing for Mandalay Bay Resort & Casino. “We are near capacity for our hotel and we have seen a strong inquiry from our casino players.”
The inaugural Barrett-Jackson Las Vegas event will be held from October 16-18 at the Mandalay Bay Events Center. It is open to the public with tickets for sale at the Barrett-Jackson web site (www.barrett-jackson.com) and onsite at the Mandalay ticket booths. SPEED will broadcast the auction live on high-definition (www.SPEEDtv.com).
Classic cars a good investment? Not surprisingly, Barrett-Jackson says yes....
By GREG MIGLIORE Is your significant other nagging you to get rid of that aging classic sitting under a tarp in a dark corner of the garage?
Maybe it's not such a bad investment. An informal index by auctioneers Barrett-Jackson is backing up the claim that top muscle cars have the potential to increase in value.
The company--whose core business is selling classics--compiled an index of American and European cars from 1957 to 1970, including the 1957 Thunderbird, the 1967 Jaguar XKE, the 1967 Shelby GT500 and the 1970 Camaro Z/28.
The auctioneers say the value of these cars has had a compounded annual growth rate of 16.4 percent from the first quarter of 1998 to the first quarter of 2008. That outpaces the growth of the Dow Jones Industrial Average, Standard & Poor's 500 and the price of gold, Barrett-Jackson says.
Not a bad return. No need for a bailout there.
But here's rub: The index is comprised of seven of the most sought-after, iconic cars of the last half-century. For the sake of enthusiasts everywhere, let's hope they would keep going up in value, though it's certainly nice to see the healthy, 16.4 percent increase.
Collectible auto prices soften
By Chris Woodyard, USA TODAY MONTEREY, Calif. — Prowling a parking lot near the romantic waterfront of Cannery Row last August, Linda and Bill Feldhorn fell in love. Not with each other. That happened more than a decade ago. Rather, they fell head over heels for a sexy two-toned 1961 Austin Healey roadster.
PHOTOS: Cars in the News drips luxury and Porsche's latest The couple from Malibu, Calif., paid $111,100 for the black-and-tan sports car when it hit the auction block. In doing so, they joined thousands of others across the nation who are turning their love of collectible automobiles into investments.
The Feldhorns and other collectors are convinced that rare cars will prove profitable in the long run. Prices are softening, but unlike the stock market, not plummeting.
FIND MORE STORIES IN: News | Internet | California | Arizona | Scottsdale | Malibu | American Intl. Group | Porsche | Ford Mustang | Linda | Study | Cannery Row | duPont Registry | Pebble Beach Concours d'Elegance | Gooding | Tom duPont | Dave Kinney | Austin Healey | Ferrari Dino | McKeel Hagerty "There is a reality check going on," said Ian Kelleher, managing director for RM Auctions in a phone interview.
So far, the auto collection world isn't awash in bargains. But prices have softened, creating some opportunity for would-be collectors looking for alternative investments.
"Things are not necessarily flying off the shelves like they were three years ago, but that's to be expected. A great car is still going to bring great money," Kelleher says.
Others agree. They say collectible cars are showing resilience. Plus, you can't drive a stock around the neighborhood.
"Cars are performing a heck of a lot better than AIG stock," says Dave Kinney, publisher of price guide Hagerty's Cars That Matter.
He says some models which recently had the biggest price increases are now seeing some of the largest declines — 7% to 15% in the last three months alone.
Some Ferraris, for instance, have taken a hit. A 1967 or 1968 Ferrari Dino 206 GT, for instance, that would have sold for $205,000 three months ago, is now valued at $195,000, according to the latest update in Kinney's guide.
But not all. A BMW 507 roadster from the late 1950s, of which only 253 were made, continues to increase in value. Prices are as high as $845,000.
The evolving market creates an opening for first-time collectors who can still afford to buy. "When there is blood in the streets, that's opportunity," Kinney says.
Declining prices lately stand in contrast to a run-up in the past decade.
Auction house Gooding & Co. sold a 1965 Ferrari 275 GTB Alloy earlier this year for $1.3 million. The same car couldn't garner a minimum bid of $225,000 when it went on the block in 2001. Competition from museum curators and international buyers is driving up costs.
Prices can swing widely on individual cars. Already, a generation that fell in love with 1960s muscle cars has seen prices of many of them dip in the past few years.
Collecting "is not just a rich man's sport," says McKeel Hagerty, who runs a financing and insurance business centered around collectible cars and who recently bought the price guide. "You can buy an awful lot of car for not a lot of money."
A budding collector can start with a 1965 Ford Mustang for as little as $15,000 and "have a blast," Hagerty says.
A new generation of collectors is expected to eventually run up the prices of the cars of their youth — sporty gems such as Datsun 240Zs or even Honda CRXs, says Kinney, who is also an appraiser.
Auctions, of course, aren't the only way to acquire a collectible car. In fact, buying through a private party gives a buyer more time to inspect the vehicle and weigh the purchase, notes Tom duPont, publisher of the duPont Registry, which lists collectible cars for sale.
For sheer excitement, though, the auction is hard to beat, especially at the high end. Several major rare car auctions are held in this coastal resort town, centered around the Pebble Beach Concours d'Elegance, every summer. Now, all eyes will be upon Barrett-Jackson Auction, held in Scottsdale, Ariz., in January, to see whether collector car prices are stabilizing. Last year, winning bids topped $88 million.
To minimize risk, experts suggest that new collectors:
•Study auctions. "The best way to find out about car auctions is to go to one, leave your checkbook at home and listen to what people have to say," Kinney says.
•Do the homework. Even if you manage to buy what you love, you need to know exactly what it is you're buying. Using the Internet, "it's easy to do research on cars that was impossible 10 or 15 years ago," Kinney says.
Inspect the car thoroughly. Look for any anomalies or parts that aren't authentic for the year and model of the car. "Anything that doesn't match your research should take the price down," duPont says.
Most auction houses employ experts in particular types or eras of cars who tend to be surprisingly candid about what their own inspections showed about a car.
•Buy what you love. Collectors who acquire cars that have special or emotional value to themselves aren't going to worry as much about price fluctuations. The pleasure of owning the car will mean more than price.
•Avoid junkers. Trying to restore a jalopy back to showroom condition could be a major money-losing proposition. New collectors often underestimate how much it will cost to turn an ugly duckling into a swan.
Finding a good-looking car, Hagerty says, can be worth more than finding one in perfect mechanical condition. Fixing a blown engine, for example, can be cheaper than paying for a mirror-finish paint job worthy of a collector car, he says.
A restoration costs "serious dough," especially for tasks such as rechroming bumpers or having parts remade from scratch, duPont says.
The payoff for diligence, though, is a car that will turn heads wherever you drive.
"The real benefit is the enjoyment," says duPont, whose personal collection of about 20 cars includes a 1929 duPont Model G speedster. "Buy what you want to own."
