Collectible Cars Hit a Bumpy Road

Slumping economy slows once roaring sector

In the past few weeks we've brought you stories of collectible and/or high-end autos making news in the auction world. The automobile segment of the omnibus collectible market has been strong in recent years and the prospects for these stylish whips when they go under the gavel are promising...or are they?

A story in the Wall Street Journal Monday points to "A Rough Ride in Collectible Cars."

It seems the global economic downturn (okay, it's worse than that) has trickled up to the glittery world of collectible cars. The WSJ story cites the tale of a certain early-'70s Ferrari Daytona Spyder:

When one of these rare early-1970s Ferrari sports cars turns up at an auction, high-end collectors typically bid aggressively, even fiercely, to acquire it. But at a recent sale in California, one Spyder failed to fetch the minimum bid.

In recent years, the vintage car market has soared, led by the priciest European models. But now, as the economy worsens to the point where even the wealthiest collectors feel pinched, demand for million-dollar sports cars is starting to skid.

Though we'll refrain from shedding crocodile tears for the luxo-car set, it does fascinate us to see how those into collectible cars stratify the haves and the have-mores. The WSJ piece notes that cars costing up to $100,000 comprise the low-end of the spectrum. That makes sense, when one considers cars selling in the millions of dollars, but a car that costs as much as a small Midwest home hardly seems "low-end" to us, but we digress. A look at the graph we borrowed from the WSJ paints a vivid picture.

More from the WSJ:

Market watchers are bracing themselves for the next big round of high-end auto auctions in Scottsdale, Ariz., in January - long a collective barometer of the market's condition. Some fear that these auctions may disappoint, much like this month's New York contemporary-art sales by the Sotheby's and Christie's auction houses. The Sotheby's sale totaled $125 million, well below the low estimate. The Christie's sale brought in $113.6 million, or about half the low estimate. At both auctions, about a third of the lots failed to sell.

For some collectors, the downturn could be a good time to amass a long-coveted vehicle or two -- not just because prices are often lower, but because cars that weren't for sale before are suddenly available. John McCue of Half Moon Bay, Calif., bought a 1958 Mercury Park Lane last summer for $39,000. The 61-year-old retired software executive says it probably cost him about 5% less than the car's value a year earlier. But since he has pursued the car for years, he knows the former owner wouldn't have sold it then.

"There are those cars that you think will never be for sale, the ones the owners will take to their graves," he says. "Well, now a lot of those cars are changing hands."

So, some owners are being forced to sell. Other aspects of their investment portfolios have been hit hard, or they've lost a job, so "liquidating their position" the '65 Plymouth Hemi Coupe is now a must.

We don't know how many collector car buffs we have among our growing audience but we'd love to hear from you, especially if you're an owner.