2 March 2010

Higher Hopes in 2010

We talk with six noted collector experts who are bullish on the year ahead.

Uncertainty made for occasional rough sailing in the collector car world last year. But there were glimmers of hope. Fuel prices spiked, then they receded. The stock market tanked and then began a slow upward climb. The August Pebble Beach auctions were stronger than predicted, as was RM’s Petersen Museum sale of Ralph Whitworth’s hot rod collection. The AACA’s annual fall meet in Hershey, Pennsylvania – long a bellwether for the hobby – was noticeably affected but not devastated. The same was true for the Barrett-Jackson auction and the huge SEMA show in Las Vegas. Car enthusiasts nationwide kept their heads down but their eyes up, and they attended many old car events with gusto. Looking toward 2010, we spoke to six well-known collector car businessmen, hobbyists and opinion leaders – David Gooding, Don Williams, Corky Coker, Bruce Meyer, McKeel Hagerty and Steve Moskowitz – asking them all the same question: What’s your 2010 prediction for the collector car hobby?

DAVID GOODING
President, Gooding & Company

Our confidence in adding a new event at Amelia Island for 2010 was proven by the 2009 Scottsdale and Pebble Beach results. Worldwide, there’s a renewed confidence in tangible assets. The car collector hobby continues to grow. Even when things looked bad, we weren’t getting panic calls from sellers. People were willing to sell second homes and boats, but they wanted to keep their cars – and they were looking to buy more. We’ve been surprised at how many new customers we’ve gained, even people who are new to the hobby. It wasn’t just one big collector but new guys buying three or four cars apiece.

Whether it’s prewar or postwar sales, we’re witnessing a very healthy, vibrant, growing hobby. Now, more than ever, the market is discerning on quality. People want authenticity, whether it’s a well-restored car or an original one. They want the proper documentation – and they’ll pay as much as 30 percent more for it. Some even will pay double for the right restoration by the right restorer, for authentic race history or for a car that’s exceedingly original. On the other hand, the race car with the crash story or the car with the wrong motor will go for less and may not even be sold. There’s a gulf between good, better and best. Right now, “good” can mean amazing value. I think we’re going to see some surprising prices in 2010. There’s a pent-up demand for great stuff, and when it appears, people will fight for it.

Vintage motorcycles have upside appreciation. Muscle cars and contemporary hot rods have suffered too hard a correction. There’s opportunity for people who love these cars. If you want a car long term because you love it, and you’re willing to keep it at least five years, there are great opportunities.

CORKY COKER
President, Coker Tire Co.

I took a long hard look at my business last year, and told my managers that these are uncommon times that can be interpreted as fear or opportunity. I elected to move forward. We acquired businesses, went to zero-based budgeting, became more aggressive and emphasized customer service. A few government actions may have contributed to a lack of confidence, but by mid-summer 2010, things will be rolling.

We will gain share with new products for hardcore racing cars and vintage motorcycles. For us, muscle cars are hot and they’ll stay that way. Although prices are fluctuating, baby boomers are buying those cars. And the biggest increase is in “resto-mods.” People want to get out and drive ’em. Demand for brass cars is up, with buyers in their 50s renewing interest. Hot rods still are cool. The big classics may suffer a bit because their owners are over 70 and there’s a glut of them. And the auction companies are active. Mecum is emphasizing Corvettes now, and Craig Jackson was smart to open his books to public scrutiny.

There are two kinds of collectors: the ones who just show their cars and the ones who like to drive them. We’ve got new radial tires that look like the old ones, but make old cars safer and more fun to drive. I’ve got a 1910 Nyberg, a former Indy race car. It looks vintage, but it’s got hidden hydraulic brakes in back and a few other modifications to make it drivable.

Encouraging collectors to drive is not just about us selling more tires. People are rediscovering the fun of driving old cars. They want their cars to be drivable – and you’ll see more of that in 2010.

BRUCE MEYER
President, Petersen Museum’s Checkered Flag 200

The coming year will be tough because the economy is still broken. Many people were running on hope through 2009, which means we’ll likely get an even bigger dose of reality in 2010. That’s because vintage cars are a discretionary purchase made by enthusiasts driven by passion. Their cars make them happy. The things you like best are the things you sell last. But some who have been holding on to their cars may finally be forced to sell. Mediocre cars will feel the most impact. Rare ones the least. Hold on to your Gullwing, Shelby GT350 or historic hot rod if you can. Highly desirable Ferraris and great classics will dip the least and recover the quickest. If you’re able to hold on to an irreplaceable car, do so. And if you have the opportunity to buy one, you should. If I see an opportunity on something I’ve always loved, I’ll buy it. Looking back, the mistakes I remember the most are the cars that I should have bought.

McKEEL HAGERTY
CEO, Hagerty Insurance

While it’s too soon to predict how much collector car values will rise in 2010, certainly 2009 ended on a better note than most people guessed. One refreshing aspect of the slowdown in buying is that people seem to be enjoying their cars more instead of wondering what they’ll buy next.

Thanks to global wealth building, manufacturers are producing and selling more high-end cars – possible future collectibles – than any time in history. We don’t know yet if the buyer of a Lamborghini Gallardo is purchasing that car because he’s an enthusiast who can afford it or if he’s simply a wealthy guy and this is a symbol of his success.

There’s been a long history of owners of old Ferraris also buying new ones. These cars are simply amazing from a performance perspective. But because of economic events, new Ferraris and other exotics have become sort of a hot potato. Buying a new exotic or luxury car isn’t considered particularly socially responsible now and in fact, it can be seen as downright unfashionable.

STEVE MOSKOWITZ
Executive Director, Antique Automobile Club of America (AACA)

Last year was an incredible one for the AACA. Meet attendance increased over all our forecasts, and we’re expecting huge results for our 75th anniversary event this summer. In fact, many of the host hotels for our 15 annual events already are sold out. Membership is up, signifying that people are more interested in enjoying the old car hobby than in listening to bad economic news. They can escape through old cars. We’re seeing that renewed enthusiasm growing across the board. Our numbers have skyrocketed in our Historical Preservation of Original Features class – which is for original and unrestored cars – and our Driver’s Participation Class (DPC). DPC allows our members to thoroughly enjoy driving their cars while still having an opportunity to participate in shows.

There’s one common thread in these predictions: although our experts may not agree on the exact timing, they anticipate a positive change for 2010. And for all of us who love collector cars, this is great news.
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To see this article in its original format, view the pdf version of the Spring 2010 issue of Hagerty magazine.

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