PH Blog: boom and bust?
Why Chris Harris reckons £324K for a 993 GT2 proves the investors are snapping up classic driver's cars
As a snapshot of the way the market is currently heading, I actually find these two prices quite reassuring - even if the numbers involved are difficult to comprehend. Essentially, the Veyron is now viewed as being too complex and expensive to run. Even very wealthy individuals baulk at the servicing, tyre and wheel replacement costs - to the point that they are not seen as good investments.
Key word that last one - investment - what we're seeing here is cars being purchased purely for capital gain, or at the very least, capital stability. You can plonk a GT2 in your garage and it'll cost you, at most, £1,000 to keep it fresh and healthy. A static Veyron would swallow ten times that sum. This explains why the GT2 went for more than an as-new 959 - a car which is notoriously expensive to keep in running order.
Motor cars seen purely as an investment is a concept that worries me though. In fact it wipes out any positive feelings I have about a world in which a super-rare 911 looks like it might be worth more than a Veyron in a few years time.
When significant cars become four-wheeled investment, erm, vehicles, the normal rules of supply and demand are swamped and you have what henceforth should be called the DB6 factor. Why? Because at the same auction a DB6 sold for £151,200. Nice things, DB6s - but over a £150K for one? Not on your nelly.
We reach this point because the DB4s and DB5s, the Astons that everyone actually wants, have moved into a another price category and those people arriving at the game a little too late, or with shallower pockets, are being advised that the next big thing will be the DB6. This could be unsound advice.
And it's at this point that we all begin to be affected by the alpha males at the top of the tree. Suddenly those bargain Aston DBSes double in value and wily traders want to tell you that a 1974 2.7 911 is actually a 2.7 RS with different bumpers and therefore worth £100K.
This is the car equivalent of the Peter Principle - the notion that people within organisations are promoted to their level of incompetence, ie, the point at which they're punching above their weight.
Which begs the question: is a Ferrari Dino worth £224,000? According to the sales results, yes it is. But despite having flared arches and Campagnolo rims, it's a V6 Ferrari of which several thousand were produced. Four years ago these cars were barely £100K, now they're appreciating at a rate that has many people referring back to the late 80s, when Japan forced a wild increase in values, only to falter and lead an even faster decline.
Does history look like repeating itself?
Judging the facts as they are, not just yet. In a world of stock market instability, property price crashes and increasing taxation, the motor car is perhaps the perfect investment: liquid, transportable, perhaps even enjoyable. And our increasingly wealthy friends in India and China haven't started collecting on any great scale yet. When the first Chinese billionaire decides he wants an example of every lightweight Porsche, expect that 993 GT2 price to climb even further.
If the general market trend looks good, some of the anomalous sums paid for cars do worry me. The fifth E-Type ever built got nowhere near its £120K estimate, whereas minutes earlier someone had bid £42,000 for a foul Aston Virage Volante, the worst possible use of VW Scirocco rear lights imaginable. I know, I know. A car is only worth what someone is willing to pay for it, but there are signs that people are hoovering up the wrong cars for the wrong money.
But it wasn't the big metal that caught my eye as I watched the live feed on my lap top. The beautiful 1978 Esprit S1, in Bond white, made just £23,520. Compared to some of the over-priced tat on display (I give you the 2005 Excalibur), it was a shining beacon of common sense.
Other favourites? My soft-top Mercedes affliction was not helped by the RHD 280SE 3.5 cab, to my eyes worth every penny of the £134,400 it fetched. On the decapotable front, I'm a complete sucker for a roofless DS, so whereas every one of my car mates thinks I'm mad for saying it, if I had the bunce I'd own one for £126,000.
Is £397K cheap for a Miura? It's all monopoly money to me, but in a world that values a Dino at £224K, that looks like a steal. Daytonas are on the march too, one fetched £319,200, which is around three times what they were worth eight years ago.
But my personal favourite was the Bentley S1 Continental - an utterly glorious machine that would land my imaginary £532,000 without hesitation.
Chris
Full results list here.
Pictures: RM Auctions (Simon Clay/Tim Scott/Tom Wood)
With regards to the 246, that price is crazy, it wasn't that long ago that 246s were a £50K car, I thought they were pricey at £100K, but £200K is just crazy.
I remember talking to an old chap who collected Ferraris - about 20 years ago. He had some absolute beauties. I asked him if he'd ever thought of selling. "Oh, I get offers every month. Last one was for millions for that car." My God, are you going to sell. "No! What would I then have to drive around in."
We need more people like that.
Interesting article though. I was struck by the fact that a 993 GT2 is worth more than a 959, but the cost of maintenance makes perfect sense as an explanation.
http://www.hmrc.gov.uk/cgt/possessions/basics.htm
Glad, because my garage is home to my 2dr Mk2 Escort project, that will (it would appear) be worth far more than the sum of its parts if I maintain my quality of workmanship, and get it to the right spec.
Absolutely gutted, however, that I can't see myself ever ticking the E30 body style from my M3 ownership history.
It's a shame in some ways, that the market place is driving such a price premium onto what I would call "drivers cars" ... Whilst a pretty Dino, or fabulous Citreon DS, will always make a wonderful sight at a motor show, or as an exhibit in a museum, cars like the 993 GT2 in the feature, and my afor mentioned Escort or M3 should be used, and used hard.
I fear that the days of these cars having their legs strectched properly are numbered, and that is always going to be a bad thing.
288 GTO 1.2 million
Testarossa 250k
512 Boxer 250k
246 Dino 170k
328 GTS 160k
Mondial Cabriolet 135k
Most stock was POA, since the asking prices were going up so quickly!
The other marques have done some catching up though. You could pick up a 1973 Porsche 911RS Touring for 80k or Lightweight for 125k.
I'm still hoping for another market crash though.
http://classifieds.pistonheads.com/classifieds/use...
The Carrera GT is one of the last true driver's Supercars - n/a screaming V10, manual gearbox, stunning uncomplicated styling. Especially with the replacement being a techno-fest I think the CGT will start to rise in value even more than they are doing currently.
Get 'em while they're hot!
288 GTO 1.2 million
Testarossa 250k
512 Boxer 250k
246 Dino 170k
328 GTS 160k
Mondial Cabriolet 135k
Most stock was POA, since the asking prices were going up so quickly!
The other marques have done some catching up though. You could pick up a 1973 Porsche 911RS Touring for 80k or Lightweight for 125k.
I'm still hoping for another market crash though.
In 1996 it was sold for $3.5m. It was resold a few times over the years.
In July this year it was sold again, this time for $35m.
http://www.autoblog.com/2012/06/02/1962-ferrari-25...
This is the sort of thing that drags the whole market upward. The people involved are billionaires - money isn't any object (not that they are really losing out as it's an appreciating asset anyway).
C
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