The multi-million-dollar Ferrari prices coming out of the Monterey auctions were absolutely mind blowing. They were part of a record sales year for the six California auctions in August that totaled more than $463 million, compared with the previous-record $302 million achieved in 2013.
But the sales growth during Monterey was primarily at the very top of the heap, the small upper echelon of one percenters bidding on the big-dog cars. Nearly 100 cars sold for more than $1 million, the most ever at Monterey, and accounted for almost $300 million, or around 65 percent of the total results for some 775 cars sold at all the auctions.
Most of the major spending at Monterey was for rare and historic Ferraris, which accounted for about $240 million of those million-dollar-plus sales for about 40 cars. Seven of the Ferraris crossed into eight-figure sales.
And that’s how it went for most of this past year. The headline-grabbing sales of top-drawer collector cars enjoyed a remarkable boom year, while the broader, more-achievable bulk of the market showed sustained but predictable growth.
The big story of the 2014 collector-car auctions are the two things that didn’t happen. Despite all the worried concern about an unsustainable “bubble” of soaring prices – going into Monterey, there was lots of Armageddon-like talk of the coming collapse – the market did not crash. Not by a long shot. Nor is it expected to happen any time soon.
At the other extreme, despite many experts predicting crazy-high prices at Monterey driven by overwhelming demand, the bidders seemed fairly clear-headed about what cars were actually worth. They were willing to pay record prices, but not ridiculous prices.
The key example was the highly publicized sale of the most expensive car ever sold at auction, the 1962 Ferrari GTO that achieved $38.1 million (including auction fees) at Bonhams in Monterey. That probably would buy you a nice villa in the south of France instead of a little red race car.
Before the sale, the pundits were predicting the GTO could go as high as $50 million or even $60 million, based on recent private sales. As it happened, the Ferrari crept up in a fairly low-intensity bidding war between two potential buyers, finally settling at a hammered price of just over $34 million, before the fees were added on. While that was a stunning amount and a vibrant world record, it still fell way short of expectations.
So not only was there no “market correction” for collector cars during 2014, the market proved to be correct. For the entire year, auction sales may have reached a record $1.3 billion, but that was just around $100 million higher than 2013 and primarily boosted by the upper-most sales, according to Hagerty. So take out the monster sales, and the market values were largely flat.
Buyers were largely in charge during 2014, rather than sellers, setting the prices and trends. The burgeoning number of bidders did drive prices to a certain degree, while investors hoping to cash in on the rising tide made their presence known, turning cars into commodities as they competed with collectors and hobbyists driven more by passion than profit.
But for anything other than the top-tier, seven- and eight-figure auction cars – the Ferraris, Ford GT40s, Porsche race cars, Shelby Cobras, Mercedes-Benz 300SL Gullwings and the like – most collector-car segments showed gradual rather than extraordinary growth in values. During 2014, hobbyists who were buying and selling in the heart of the market in the $50,000 range, more or less, saw little of the top end’s startling price boosts.
The prevailing thought is that the collector-car market is on track for now, with the über wealthy continuing to spend huge dollars for truly great cars (mostly Ferraris) and the vast majority of us moving along as usual.
Some additional takeaways from an intriguing year of classic cars auctions:
“Barn finds” score – Bedraggled, neglected, dirty collector cars seemed to come out of the woodwork, or more precisely, out of dank barns, leaky garages and musty warehouses. And they were turning up at top auctions in increasing numbers, with a significant bonus if they were still covered in as-found crud. Some sold for more than $1 million despite their vast needs, adding to the year’s top results.
Bonhams arrives – After a number of blasé sales, the thinking was that if the British auction house failed to hit it big in Monterey this time around, it would have to fold its tent in the U.S. and sail home.
But Bonhams managed to pull it off with a booming sale in August, boosted by a private collection of Ferraris that included the 1962 GTO that drew the world’s attention and, as mentioned, the highest sales price for an auction car in recorded history. That’s pretty heady stuff and served to put Bonhams finally in the same league as premier auctions RM and Gooding.
Mecum binges – No one is claiming that Dana Mecum is out to conquer the world, but during 2014, the maestro of gigantic collector-car sales added another three large-scale events to his annual calendar of Mecum Auctions, bringing the total to 21 nationwide auctions per year, including the four that sell tractors, motorcycles or toys.
There are an increasing number of collector-car auctions being established with a growing number of cars coming up for sale and more bidders than ever competing for them. Already, some auction companies are complaining that there are just not enough good cars available, and auction-goers are noting the same cars that keep appearing for sale over and over again.
Which raises the question: Will we reach the point of saturation, where demand so outstrips supply that there will be too many auctions and not enough cars to sell? That’s another bubble to worry about.
