by Rick Kopec (12/28/08)
....Are you ready for Scottsdale? Yes, sports fans, it’s getting close to that time of the year when all eyes turn towards Arizona. The annual January automobile auctions are the largest, most garish and — thanks to the miracle of 30+ hours of live Speed channel television coverage — the most talked about, and they are almost ready to begin. For many, the Saturday afternoon-into-evening auction has become the automotive equivalent of a “superbowl party,” where groups of friends congregate in someone’s playroom, knocking back brewskis and munching handfuls of snacks as the seemingly never-ending conga line of cars crossing the block are described and verbally fondled by the on-air “experts.”
And wouldn’t you like to get a look at the cars that are in these know-it-alls’ garages? They remind you of real estate agents who gloss over water stains, bad roof shingles, cracked foundations and other “minor problems” in a desperate attempt to close the sale. These “experts” rarely see anything really wrong with the cars they are describing, or if they do they are quick to downplay it. It’s hard to imagine their having this same wide-eyed, golly-gee-willikers attitude if they were preparing to spend their own money to buy one of these vehicles.
The January Arizona auctions are often seen as the bellweather for collector and exotic car prices for the coming year. Many are convinced they are an indication of where “the market” is headed in the short term. As if anyone really knows until they acquire some hindsight. In light of the looming economic crisis, surrounded by the triple specters of rising unemployment, higher taxes and tanking stock prices, and along with the huge stink bomb going off in the center of the mortgage industry, not many people are able to convince themselves that collector car prices will continue their rise. Most are just wondering how fast and how far they will fall. The “No Reserve” auction may have become a relic of the past.
Like a lot of the cars that cross the carpeted auction block, there is a lot more going on than meets the eye. While the average enthusiast (if, in fact, there is such a thing) thinks he or she can divine something from these January auction results, they don’t really give a clear picture of exactly where the market is heading this coming year or where it was a year ago—other than a vague feeling that it seems to be moving in one direction or the other. These auction prices are not representative of anything beyond prices that are bid at these auctions. Sellers of cars not in these auctions believe (or would like to believe) that if their cars are equivalent, they should bring comparable prices. But rarely does a car advertised on ebay or for sale at a local car show bring the same amount of money.
The reason why auction results are so hard to extrapolate beyond the auctions is likely due to the large number of cars being auctioned off during this frenzied, three-week free-for-all, and because there are so many separate categories that it is impossible to keep track of where a particular make or model fits into the mix. Values of the blue chip investments are the easiest to follow: Duesenbergs, high-end Ferraris, unmolested Cobras, Packards, Dalayahes, Bugattis, etc.
Muscle cars like Hemi-anythings, certain big block Corvettes, most Shelbys, early Firebird Trans-Ams, nostalgic favorites like 409 Chevys and 396 Camaros, and 440 6-Pack Plymouths and Dodges have carved a deep niche in the market but the popularity of these top-of-the-pyramid cars has caused the second tier beneath them to be sucked up into the vortex, and those are the prices that may be difficult to maintain. It is cars like run-of-the-mill GTOs, 442s, 427 Galaxies, 350 Chevy IIs, Boss302s, AMXs, Mach Is and small block Corvettes that will be scrambling for chairs when the music stops, signaling the beginning of a downturn in prices. Whether it is gradual or a rollercoaster drop remains to be seen.
There is actually another tier, between the two described above, but it is a very small and specialized niche. These were the special models based on muscle cars but produced in extremely small numbers by top-name dealers like Yenko Chevrolet, Tasca Ford, Nickey Chevrolet, Royal Pontiac, Fred Gibb Chevrolet, Mr. Norm’s Grand Spaulding Dodge, Dana Chevrolet, Berger Chevrolet, or by specialty shops like Motion Performance or Hurst Industries.
Race cars, street rods, customs, restomods and the most recent act in the carnival— recreation or tribute cars—all contribute to muddying the waters because they do not fit neatly into the categories which have been established over the years. For example, some race cars have verifiable histories and it is easy to determine if they have been restored accurately. Others have less easily traceable histories with lower historical profiles. Who can tell if they are as they should be and what they are worth? And then there are cars that have no history but have been made to look like others that do, in hopes of being pulled along on an upward pricing trend.
Street rods or customs that have a bonafide history, with perhaps a famous (in the hot rodding world, anyway) original owner or well known constructor like George Barris, Ed Roth, Bill Cushenberry, Gene Winfield, the Alexander Brothers, Boyd Coddington or John Buttera are at the top of the heap. A top award like an Oakland Roadster Show trophy or an appearance on the cover of Hot Rod magazine can also boost a car to the top of the pyramid. But where anything else fits is anyone’s guess. Certainly workmanship has a value, as does the right combination of parts, but beyond that who knows?
One of the newest “trends” is the tribute or recreation car. Exactly how these have risen in stature recently is probably more the result of auction companies actively shilling them rather than any groundswell of interest coming from buyers. Let’s face it: these auctions are a business, the purpose of which is for the auction company to make money. They receive a percentage of the final hammer price from the seller as well as the buyer, not to mention a fee for accepting the car into the auction, and additional fees for moving the cars into “prime time.” The more a car sells for, the more money the company makes.
There was a time, not all that long ago, when someone taking a 1965 Pontiac Tempest and customizing it to look exactly like a GTO, using actual parts that came from one or more GTOs, would cause most people to look down their nose at such cars and their owners. You’d shake your head and feel a little sorry for them; instead of stepping up to buy the real thing, they have spent all this time, effort and money into creating a car that never really was—a fantasy that fulfilled the owner’s dream of having a car he would not otherwise ever be able to own. Ok, it’s a big hobby and to each his own. But once owners tired of these wannabees and were looking to sell them, auction companies were happy to welcome them into the game, and realizing that they could make more if these cars sold for higher sums rather than lower ones, started hyping them by giving them credibility during the auction process. That explains why a bottom-of-the-line 1970 Plymouth Barracuda, formerly powered by a 198 cubic-inch, 6 cylinder engine with an automatic transmission could be restored as a 426 Hemi-powered 4-speed, with all of the correct parts that would have come on one of these cars, and cross the block for over $100,000.
And while we’re on the subject of Scottsdale, isn’t it amazing that they are able to attract such a large number of bidders who all seem to fit the same general profile? Male, Caucasian, 60 to 70 years old, appearing to have money to burn and an “I always wanted one of those” attitude. How else can you explain why two overweight, white-haired, turkey gizzards in bright windbreakers would be going at each other, in $500 increments, over a bright green 1963 Ford Galaxie 390 convertible with fender skirts and a white interior? It’s certainly not because they each possess a sixth sense that this car is likely to have rapid potential for appreciation in the future.
Pass the pretzels.
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