In Classic Car Market, Exceptional Is the Rule

https://www.nytimes.com/2018/08/31/arts/ferrari-classic-car-auctions.html

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Are classic cars still a va-va-voom investment?

That was the question in Monterey, Calif., during a series of recent auctions timed to coincide with the annual Pebble Beach Concours d’Élégance pageant of lovingly restored classic automobiles.

Classic cars have for some time been the poster child of so-called investments of passion. According to a report published in April by the realtors Knight Frank, they have been by far the best-performing luxury investment over the last 10 years, achieving returns of 288 percent. But over the past year, the report added, the value of the classic car market lost 1 percent, far behind the 21 percent gains achieved by art over the same period. The change, Knight Frank said, was because of an exodus of speculators.

“The speculators have left the market to some degree, and now people are prepared to do their research and buy good cars,” said McKeel Hagerty, chief executive of Hagerty, a classic car insurer that tracked results at the California auctions.

According to Hagerty’s data, RM Sotheby’s, Gooding & Company, Bonhams, Mecum, Russo and Steele, and Worldwide Auctioneers offered no fewer than 2,217 automobiles; 61 percent of the lots were sold, raising $367.5 million. The total was $40 million higher than that of last August, thanks to an additional 183 cars, but the average price of $436,982 represented growth of 1 percent, according to the data.

“It’s a strong collectors’ market, and they’re an astute crowd,” Mr. Hagerty said.

The market was certainly perceived as strong enough for owners to part with some exceptional cars, mainly at RM Sotheby’s and Gooding, both of which held two-day auctions.

Most of the pre-auction publicity was focused on a 1962 Ferrari 250 GTO guaranteed to sell at RM Sotheby’s on Saturday for at least $40 million, making it the most valuable car ever sold at auction, even before the bidding began.

Just 39 of these cult racing coupes were built between 1962 and 1964. The GTO never quite managed to win the 24-hour race at Le Mans — it came second twice — but it has nonetheless acquired the status of the world’s most desirable and expensive car.

That mystique was enhanced this year, when a well-preserved 1963 “Series I” GTO with an impressive racing history and distinctive silver bodywork sold privately for an undisclosed price of at least $70 million, setting a new high for any classic car.

Owned by the German collector Christian Gläsel, the Ferrari came fourth at Le Mans in 1963 before winning the Tour de France Automobile endurance race the following year. It was bought by the American collector David MacNeil, the founder of WeatherTech, which makes accessories for cars. As is often the case with such private transactions, the exact price has yet to be confirmed, but it has been reported to be as high as $80 million. Neither Mr. MacNeil nor Lukas Hüni, one of the dealers who negotiated the transaction, responded to emailed requests for clarification.

The 250 GTO sold by RM Sotheby’s was not as valuable: It is one of seven with the less-coveted “Series II” body shape, and it has a less prestigious racing history. The car was owned by Greg Whitten, the former chief software architect at Microsoft, who bought the car in 2000 for $7 million.

Mr. Whitten had been guaranteed an undisclosed minimum price by RM Sotheby’s. That financial mechanism, usually supported by a third party, is often used at high-end contemporary art sales, where it can dampen bidding. After a flurry of activity on the telephones, the Ferrari sold for $48.4 million with fees, just above the low estimate of $45 million, based on hammer prices. “Prospective buyers bid beyond the guarantee,” Meghan McGrail, a spokeswoman for the auction house, said in an email, without providing further details.

“The car was a GTO. It wasn’t the GTO. But it did well for what it was,” said Simon Kidston, a dealer based in Geneva who founded the K500 index of classic cars.

The previous high for any car at auction was the $38.1 million achieved at Bonhams in 2014 for a Ferrari 250 GTO that had been rebuilt after a fatal crash.

But for many, the real sensation of the week was the price achieved on Saturday at Gooding & Company for a 1935 Duesenberg SSJ Roadster that had been delivered new to the actor Gary Cooper.

One of just two short-chassis versions, the car, which still has its original coachwork, chassis and engine, had been owned since 1986 by the Florida collector Miles C. Collier, who made it the star exhibit of his Revs Institute.

At least five bidders pushed the price far beyond the low estimate of $10 million, to $22 million with fees — a high for any American automobile at auction. The price, given by an American collector, momentarily confounded market perceptions that prewar cars had fallen out of fashion.

“It was the first ‘masterpiece’ quality prewar car to have come on the market for some time,” said David Gooding, chief executive and founder of the auction house. “It shows you that if you can offer something completely fresh to the market at a reasonable estimate, you can still create auction magic.”

There were plenty of examples of the classic car world’s passion for originality further down the price chain. At Bonhams, a 1948 MG TC Midget sports car with just 28,000 miles on the clock inspired applause when it sold for $112,000, three times the estimate, while at RM Sotheby’s, one of 20 early-production 1961 E-Type Jaguar fixed-head coupes with much-admired outside hood latches (yes, it gets that geeky) sold over estimate for $720,000.

Mr. Kidston, who negotiated private sales of two Ferrari 250 GTOs for undisclosed prices within the past year, wrote in a recent magazine article that the demographic of the classic car market was “primarily white, middle-aged, male and conservative.”

How long can such a clientele sustain heady prices for classics that often mean much less to a younger, more environmentally conscious generation?

At the Concours d’Élégance, Jaguar introduced its E-Type Zero, an electric conversion service for the 1960s British sports car. In May, Prince Harry and the former Meghan Markle drove a prototype to their wedding reception.

“Demographics will be the biggest factor of change in the car collecting market,” Mr. Kidston said. “For the younger generation, cars of the ’60s and ’70s have become old masters. The best of the best will still appreciate, but will people still want to buy a two-plus-two E-Type?”

Maybe they will, if it converts to electric.