17 August 2016

Monterey’s best-kept auction secret

State of the Market: Monterey 2016 edition

Cynicism comes naturally when reading Monterey coverage. Articles and photos focus on shiny cars costing large multiples of most peoples’ homes. And it’s true that when discussing the classic car market, million-dollar models hold sway. Nowhere is that more apparent than in California during Monterey Car Week.

Each auction house assembles a staggering array of cars, mostly skewed towards seven-figure lots. Each venue is essentially a mini concours. So why are folks so focused on the very top on the market, besides the sensational, when it affects so few?

It is because these cars’ fate will shape the story emerging from Monterey this year, which will consequently set the rest of 2016’s tone. The timing may not seem ideal for a cheery narrative, superficially, as sell-through rates on million-dollar cars have fallen so far this year and some cars at this level have actually depreciated slightly (e.g., Ferrari Daytona Spiders and Mercedes-Benz 300SLs). But even with the top of the market slowing, buyers continue stepping up for “once-in-a-lifetime” opportunities. Indeed, there are likely enough collectors operating at this level focused on grabbing a favorite while it’s available. After all, that chance may not repeat for more than a generation.

But while the gawkers are focused on the market’s pinnacle, Monterey Car Week presents a unique opportunity for folks of more modest means. More on this in a moment.

Yes, this year RM Sotheby’s is offering Shelby Cobra CSX2000 (the first production Cobra), the Le Mans-winning 1954 Jaguar D-type and Sam Mann’s Alfa Romeo 8C 2900B Lungo Spider. Gooding & Company is showcasing a 1932 Bugatti Type 55 roadster, a 1933 Alfa Romeo 8C 2300 Monza and an alloy-bodied 1959 Ferrari 250 GT California LWB Spider. Bonhams’ star car is Tazio Nuvolari’s 1931 Bugatti Type 51 Grand Prix racecar. For most of those cars the price of entry starts at $10M and quickly ascends. Suffice to say the 2016 auction lineup rivals any of the previous years’.

However, the vast majority of car owners remain unaffected regardless of the outcome. The entry and middle levels of the market have been growing all year and will likely stay on track this week. At this level, the average classic car buyer isn’t necessarily considering macroeconomic forces as much as he is thinking about how he can finally own that $6,000 Miata, that $30,000 mid-year Corvette, or that $50,000 Porsche 911 he or she has always wanted. Many of those buyers are at a point in their life where they want a fun car today, and there are more options than ever at a variety of levels. And Monterey’s [possibly] best-kept secret is that there are plenty of those cars available.

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