Monday, August 22, 2011

Market Fickleness

You don't get into the collector car market for an investment. More correctly I should say you shouldn't get into the collector car market for an investment. Oh, like any market if your timing is good you can make a pretty penny but you shouldn't do it unless you actually love the cars. Unfortunately the market doesn't necessarily work that way. Personally, I blame the Baby Boomers.

I'm a big fan of the Ferrari Daytona. I have been since I discovered its existence. Think the original black car from Miami Vice above.

When I first started paying attention in the early 90s these cars went about $500K for a coupe and $750K for an original spider, Ferrari's term for a convertible. All Daytonas started life as coupes but Ferrari sent 120 some to a coach builder to convert them to spiders. A lot of people have used various builders to convert their coupes to spiders over time. Since I started paying attention prices for Daytonas have gone through many ups and downs. I've never graphed it but I've always felt collectible car prices were a trailing indicator of the stock market.

Last August this original spider sold for $1.05MM.

This weekend a coupe (middle car above) with less than 10K miles bid up to about $330K but didn't sell because it failed to meet the owner's reserve price.

However, this convertible, that started life as a coupe, sold for $300K. One thing that makes this conversion special is the original owner sent his coupe to the same coach builder that Ferrari used and had the conversion done to Ferrari specifications. In the collector market originality is everything and this isn't original. However, it is as close as you can get.

Without cross referencing the car's VIN with the factory production logs one would be very hard pressed to know the difference between this car and the $1M car sold 12 months ago at the same auction. Two data points to not make a trend. Auctions notoriously give inconsistent results as it takes just two or more interested buyers to drive up a sale price. Still these two sales hint a decrease in prices may be underway. Not that I'll ever afford a Ferrari Daytona on my current career path. One must have interests though.



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