Signs of weakness in collector car auction market
This article was originally on a blog post platform and may be missing photos, graphics or links. See About archive blog posts.
A sale of Impressionist paintings at Sotheby’s or Christie’s is typically preceded by a round of white-glove collectors’ previews, and occasionally accompanied by a glass of white wine.
A Barrett-Jackson auction of collector automobiles strikes a slightly different tone. Its most recent sale, at the Mandalay Bay hotel on the Las Vegas Strip last weekend, was ushered in with a performance by Robosaurus, which ate a car. A beach party followed. During the three-day auction, Robosaurus came back seven more times to breathe fire and eat more cars.
Considering the state of the stock market (Dow down another 514 points today), bidders at the sale must have been eating fairy dust.
All told, they dropped $29,216,290, including a 10% buyer’s commission, on the sale’s 533 lots. That averages out to about $54,814 per car, all of which were sold without a reserve price. The company’s previous sale in April in Palm Beach, Fla., hammered down $23 million on 510 cars, which works out to a mere $46,100 per lot.
Show organizers touted the results as evidence of a recession-proof industry niche. ‘Economic uncertainty was nowhere to be found,’ a Barrett-Jackson news release states. But looked at it another way, perhaps the sale wasn’t that strong.
Barrett-Jackson’s biggest sale is in January in Scottsdale, Ariz. This year, auctioneers sold 1,163 cars for a total of $88 million, an average of about $75,600 per car. And that result paled in comparison to January 2006’s results, when bidders paid $111 million for 1,271 vehicles — an average of $87,332. Then there was 2005, when the average price paid for the 1,084 cars sold in Scottsdale was $92,324.
Suddenly, last weekend’s results look a little less Robospectacular: a 42% decline in average car price from the 2005 high.
Of course, average pricing can be a bit misleading, since hugely expensive lots can skew the data. In 2006, for example, one car, a 1966 Shelby Cobra Super Snake, sold for $5.5 million.
Then again, the willingness of buyers to drop major coin on a single car is also an indicator of how healthy the market for a collectible is today. That’s as true with baseball cards and fine wines as it is with vintage automobiles. And last weekend, only one record was set, with $313,500 paid for a 1949 MG TC that was Carroll Shelby’s first race car.
That also was the highest price on a lot. Only one other car reached $300K, a 2006 Ford Mustang GT customized by Funkmaster Flex, which was one of seven charity cars with no buyer’s commission.
Six cars came in above $200,000. Auction organizers could easily point out that there may have been no cars on the block of high six-figure or even seven-figure quality, hence the lower prices. But the lack of high-quality cars up for consignment could be a sign of collector unease in the face of the current market challenges.
And since this was a no-reserve auction, cars sold even if bidding was weak. Twenty cars brought less than $10,000.
The weekend’s cheapest car? A 1979 Lincoln Continental in ice blue with only 25,000 miles. It sold for $5,170. Now that’s a deal!
—Ken Bensinger