Classic opportunities
By Nigel Moll - December 1, 2009
ON A PROMO FOR DISCOVERY HD THEATER’S Chasing Classic Cars, host Wayne Carini tells viewers, “I chase cars,” his wry expression suggesting he has heard the one about the dog that chases cars but can’t figure out why when it catches one. Unlike the dog, Carini has a shrewd nose for which cars to chase and knows exactly what to do with one when he runs it to ground. Carini’s case of the car bug is about as virulent as Jay Leno’s. But Carini’s TV show has a ways to go to catch Leno’s, and he continues to make his living by buying, restoring and selling notable cars.
Carini’s rule of thumb is a simple, 80-proof distillation of advice for anyone considering the purchase of a classic car as an investment: “I look for cars that I’d like to own. I’m not a muscle-car guy. Always a sports-car fan. I have to like what I sell. If I’m not passionate about it, I can’t sell it.”
Some of his finds are for restoration of a specific model at the behest of a customer. He hears about others that, for reasons of scarcity or some less easily defined appeal, are too good to pass up and might eventually find their way into his personal collection. (When asked just how many cars he owns, Carini said only, “Too many, but never enough.”)
The recession has changed the climate for classic cars as markedly as it has many other markets, said Carini, who has been buying, restoring and selling collectible autos for 40 years. “Prices for some cars–those regarded as B or less investment quality–are down 20 to 30 percent,” he added, citing muscle cars and sedans with no racing history. Prices of newer exotic cars have fallen drastically, too. You can now buy an Aston Martin V8 Vantage with only four figures on the odometer, for example, for as little as $70,000, not far off half its price when new two years ago.
“The car market is like the art market,” said Carini, who owns F40 Motorsports in Portland, Conn. “Really good rare paintings, rugs and furniture have not fallen off. It’s the same with collector cars like old Bentleys and Ferraris. A Ferrari GTO was worth $10 million five years ago. Now it’s worth $25 million, despite the recession. Instead of 10 to 15 top-notch spectacular cars, auctions now have maybe two. Owners are retaining them for when the market comes back.”
As Ian Kelleher, CEO of RM Auctions, put it, “Investment-grade collector cars–rather than the market for cars driven by passion–still operate within their own bubble.” Prices of muscle cars have bottomed out to some degree, Kelleher noted, but there are exceptions: “A Hemi ’Cuda went from $100,000 to $700,000 with no rhyme or reason. I swear, some of these guys [at auctions] just like looking at themselves later on TV with their friends and neighbors. Passion overwhelms good decision-making. A ’71 Hemi ’Cuda convertible, one of 11 built, recently went for about $2 million. The buyer already had two of the 11 and wants to maintain their value so he bought a third. To him, that was not crazy thinking. But when a nondescript Camaro can fetch $150,000 you know the market will, at some point, take a turn for the worse.”
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