New Yorkers walk past the Sotheby’s window and admire the Candy Orange McLaren F1. Spectacular in performance and appearance, the onlookers may not realize that this particular McLaren is about to set another record and it has nothing to do with speed and performance.
The last McLaren F1 that went across the block fetched about $8.5 Million for a car that originally cost $1 million. This orange beauty is expected rake in around $12 million when it hits the podium in August and would be a record sale for any McLaren at auction.
Demand for vintage and exotic cars are skyrocketing and the prices listed for the McLarens above just scratch the surface. The most expensive car auction goes to a 1962 Ferrari GTO that sold for an astonishing $34.65 million and that just beat a Mercedes vintage racer that sold for $31.6 million previously.
Condition of vintage cars can greatly affect the value but the car’s history can trump all when calculating valuations. The Ferrari GTO mentioned earlier for instance was the 19th unit built out of 36 and was owned by French race car driver Jo Schlesser. Previous ownership, racing wins and build history are important factors for determining a car’s market price.
Cars that claim to be all original can rake in larger values then their modified and updated counterparts. One auction house goes to painstaking lengths to make sure their restorations are indeed all original. In one instance, they were able to track down the original cracked engine of a Ford Edsel at a garage over 3000 miles away, repaired it and reinstalled it into the car. Quality and detailed restorations of this level add to the increasing values of properly commissioned cars.
Babying Your Babies
Car collectors may not all agree on what makes and models are worth the most, but they do all exhibit the same high level of commitment when managing their collections. Collectors also can have their cars value based on their own reputation. Car enthusiasts such as Jay Leno and Ralph Lauren are known for having the most up to date garages manned by highly skilled mechanics and vehicles from those collections will command higher prices because of the quality upkeep.
A specialized industry exists that caters to exotic and vintage car collectors. Everything from diagnostic tools, to garage lifts, to flooring and lighting and even insurance can be fine tuned and tailored to the unique and rare automobile
The Business of Auctions
Auction houses are enjoying a boom time with the increase in sales volume. Sotheby’s indicates that the vintage and exotic car market will top $2 billion this year and has led them to a strategic partnership with RM Auctions, a leader in automotive auctions. Higher profile sales and lucrative TV contracts are bringing more spotlights to the industry and perhaps will spark new interest among affluent collectors and investors looking to park their money.
HAGI, an investment research firm that specializes in rare and classic automobiles, suggests that classic car valuations have risen 2 and half times since the recession of 2008. Not only might classic cars be a wise investment, but they are also much nicer to look at then a pile of stocks or municipal bonds.
By Doron Levy – TheTopTier Digital Media