The sky isn't falling, just Musclecar prices....

I remember when that car was for sale for $25K, that was about 8 years ago or so. I would love to own that car, one of the coolest color combos I've seen. :kodak:

 

"Too bad so many people are into classic cars for the $$$, instead of the love of the cars"


First off I am a collector and a hobbyist, I drag race and personally work on everything I have ever owned and have for 30 years. I truly love all muscle brands and I am glad I am fortunate to drive them all.

That said, there is more to why prices went sky high a few years ago, then "those damn collectors". The cost of restoring a muscle car became
almost prohibitive a few years ago, and if you did restore your vehicle, you had to sell your car for more than the 30-40K you just spent on the restoration in order to break even. That drove up selling prices.

The age group that we are in is typically searching for their youth in some way, and loads of people who had extra cash from borrowing against their inflated home values, went out and decided to buy that car they always wanted at any cost. These are the years just before you are too old to enjoy stuff like muscle cars for most people, so alot of people went out and bought.

Televised auctions also drove up prices to the average guy with a sh*tbox in his garage for 30 years. All of a sudden he was a millionaire!! Needless to say his car was probably several quality grades below
the car he saw on the TV. He still wanted that selling price no matter what...."Gee I seen it on TV, it must be worth $500K"

This combined with events like the Pure Stock Drags, FAST events, and the stuff I promote here on the east coast, always getting magazine coverage somewhere, helped stoke the fires of ownership. Mostly I credit this small percentage of the whole muscle car ownership phenomenon to the Pure Stock Drags which has the biggest event and the best complete ongoing coverage.

There have always been collectors, and they dont influence the price of the item, only if that item becomes perceived as valuable do prices then go up. If there become suddenly MORE collectors of the same vehicles than there were a few years ago, those vehicles go up in value. People collect all kinds of crap...most of it nobody wants...like old metal coat hangers...but the poor SOB who collects those coat hangers doesn't influence any prices, because no one else wants them.

In a sense, there is no scape goats here. We are all collectors in some sense, and even boards like these have contributed to the muscle cars increase in value over the years.

Its not us against them.......for we ARE Them.

 

"The cost of restoring a muscle car became almost prohibitive a few years ago, and if you did restore your vehicle, you had to sell your car for more than the 30-40K you just spent on the restoration in order to break even. That drove up selling prices."

I totally agree with this but with a twist. Yes, the cost of restorations increased drastically. That comes with more folks wanting to restore that old car they have or just bought, sending part prices higher because of demand. Then you have the labor cost of the shops increasing to $75-$100 per hour or more. Some collectible cars were worth this investment and "sellers" were jumping on this opportunity. But, unfortunately, the problem with this approach was that many folks were paying others to restore a car that was not going to be worth the money they were putting into it once it was done. Again, uneducated consumers. I am friends with a local guy who does restorations and I couldn't tell you how many times we questioned this act. Spending 20-30-40-50K+ on a restoration of a car or truck that was only going to be worth 10-20-30K once done does not constitute a price tag consistent with the amount of money you have into the car. But where was the real problem with this? It was with the person who was buying these cars for more then they were worth because someone had 50K into the restoration. My wife employs this line of logic. She feels that a car should be looked at as a value to the thought of "how much would it cost you to do that car like that"? I tell her all the time "but it's ONLY worth $XXX no matter how much you have invested in it". Then I hear "what if you always wanted one"? I say "find one that is priced right". What we are seeing today is that buyers do not care how much you paid for that restoration. The car is only worth what the market will bear, which we all agree is considerably down. Watching the Mecum auction last night proved that point.


The age group that we are in is typically searching for their youth in some way, and loads of people who had extra cash from borrowing against their inflated home values, went out and decided to buy that car they always wanted at any cost. These are the years just before you are too old to enjoy stuff like muscle cars for most people, so alot of people went out and bought.

Again, I agree. Again, uneducated buyers. These are also the folks that will be selling these cars at unbelievable losses because of a "fire sale"...they will need the cash and this will be the first to go.


Televised auctions also drove up prices to the average guy with a sh*tbox in his garage for 30 years. All of a sudden he was a millionaire!! Needless to say his car was probably several quality grades below
the car he saw on the TV. He still wanted that selling price no matter what...."Gee I seen it on TV, it must be worth $500K"

Boy, here I couldn't agree with you more. All of the suddan after a couple of televised car auctions EVERY car ever made was worth big money. I have had this discussion with many a person. I have been to a few of those auctions (and kept my hands in my pocket) and agree that the quality of most of the cars and trucks at them were very good to excellent. Even at that, most folks just see what they see on TV. There actually are some decent deals to be had on cars that go over the block when the cameras were not running. But, here is my main point. If you are a blue collar working man making 50K a year and a very nice car you would want became available for 5K, would you buy it? Probably, unless things were that tight on your budget. Now let's compare that to the guy who hits the B-J auction in Scotsdale. He is making $1 Million a year, so to spend 100K on a car is no different then me willing to spend 5K. Only difference is that I will spend my 5K wisely and he will just spend it. God knows I wish I had that kind of dispensible income...my collection would be outstanding right now and I STILL wouldn't have over spent on anything!:TU:
My bottom line opinion here...It's about supply and demand, available funds and educated to non-educated consumers.
Bruce

 

WSJ article.

http://online.wsj.com/article/SB122757588574055233.html?mod=article-outset-box

 

The quote should read " The love of cars never outweighs the need for money" especially in today economy.

 

When it comes to old cars, never let the lack of money keep you from your passion. Money comes and goes........

 

It should say..."You can always live in your car, you can't drive your house"
:laugh:

I hate to say it, but I told ya so:Smarty:

 

Yeah you did but it was fun while it lasted !!:beers2:

 

Still is fun......not really doing anything with them, but still have 'em. Unlike horses, yachts, or airplanes, doesn't cost a lot just sitting there. Once they're gone, they're gone...........:beers2:

 

I have noticed a fall in the price of nostalgic muscle cars over the past year. In my opinon and I'll assume most other's as well, the monster commonly known as Barrett Jackson destroyed the "Hobby" for most car enthusiast's. In a time when money was apparently at a surplus, 2000-2006 millionaires went out and threw loads of it at classic muscle cars as an investment. I never looked at owning a classic automobile as being an investment until I startedwatching these auctions. I still don't because i don't believe you ever actually recoup the money spent on purchasing, owning and refinishing our cars. Especially Buicks, unless it's a rare GSX model perhaps. I don't intend on selling my cars so the whole investment idea is lost on me.

The idea of owning a classic muscle car and not driving it is a total mystery to me. Maybe it's because I don't have bucket loads of money to stock pile cars, but if I'm buying a car, whether it be new or old, it is after all, a car and I'll be driving. I drive my two muscle cars a lot during the spring and summer. And I drive them hard! Why? Because that's why I bought them.

That's all I have to say about that.

 

I don't know about that...if you're "hobby" was picking up a project, throwing a little time/money at it, then selling it, or even if you were just a turn & burn dealer, you were pretty much assured you could recoup your investment [and then some] whenever it was time to sell...and B-J provided the needed visibility to keep the snowball rolling. Real estate & collector cars were eerily similar lately, except cars haven't taken the huge hit like real estate [due in part to the mortgage bank fall out], cars have just kind of taken the "slack" out of the margin. While I wouldn't mind seeing the bottom drop out so I could add to the stable, the small niche cars that I track seem to be continuing in the opposite direction...

 

[in reply to gospdgo's post above]

But if you could afford to own a dozen -- or two dozen -- muscle cars or other classics you would, right? And out of necessity you would drive each of them less than if you only owned only one classic. A few of the cars might be lucky to see the road more than once or twice a year. But you would still enjoy collecting those cars, right? Should you be looked upon with scorn for collecting those cars without driving them as much as someone else might?

I don't buy the argument that the "rich" (definition: someone with more money than me) buy these cars as investments. I'm sure a few do, and I'm sure that many others justify their purchase by knowing that at least it shouldn't lose value. But I've gotta believe that many of these "rich" people truly are car guys. Maybe they aren't as mechanically inclined as you, maybe they'd rather pay someone else to change their oil. But does that make them any lower than you, or less deserving of owning these cars? As an easy example, consider Jay Leno. And as a counter example, I can think of at least one member of this board who buys and sells numerous cars per year, usually making a profit, but loving the cars just the same.

I also don't understand blaming Barrett-Jackson for the prices. As much as I dislike their circus atmosphere, blaming them for escalating musclecar prices is like blaming Sotheby's for the rising price of a Monet or Stradivarius. The price on any given day is simple supply and demand.

 

reply to BlackGold............BINGO!!!! 100% agreement

 

I don't keep up on big dollar fully restored car prices, but I know that project cars, say under $3,000 are out there by the tons. Lots of cars that are way too high priced, but lots of good deals. People selling their projects and if you shop around you can pick up a bargain. Lots of sellers that don't know how to market, or are in a hurry. I bought and sold three times starting with an $800 Mercury comet to get my way up to buying a nice Buick. I looked at a lot of over priced rusty parts cars that were suppose to be solid, but hidden in those cars were some bargains that I was able to turn over and build my way up to something better than I hoped to get when I started.

 

No. And honestly, I can only think of about 5 cars that I would REALLY want. I love cars of all makes, models and years but that doesn't mean I want them all in my garage. Because I know they would just sit there and collect dust. Like I said, I enjoy the two I have and I have them because I enjoy driving them. Can only drive so many cars so often. To be able to walk into a garage full of cars just to look at doesn't do anything for. Getting in the time to drive the two I have is hard enough...having 12 means most of those aren't getting driven.

And I also stand by my notion that a lot of these cars the wealthy buy are strictly for investment purposes, and I say this because I have seen shows and read articles on people who collect them and never drive them. That's their exact words. Occasionally, they'll put them on a trailer to haul to some show because they are asked to by a certain promoter and such. You don't buy a 500K+ 1967 Mustang GT500KR to go to the ice cream parlor. You buy it to trailer to a show to pick up a trophy here and there and then sell in 5-10 years for...a profit!

I don't care what people do with their cars or how many they buy. I don't look at them with scorn either. That's the great thing about America. You can do what ever you want with your money. But I do think they drove up the cost of classic vehicles because of their future interests. And, yes, I realize that many also purchase them for nostalgic reasons.

I just wanted to say, I don't look at this hobby as an investment. I look at it as a recreation of sorts. Much like playing golf or some team sport. I enjoy driving them and hanging out with others with the same interest and never think, "boy, I wonder what I can get for this thing in another 10 years?". If you're going to buy it, then drive it. That's my philosophy. If you asked me what i thought mine were worth, I'd have no clue...let me watch B-J and I'll get back with you.:laugh:

Cheers

 

LOL...that train of thought isn't held just by the wealthy...seems like every other guy I talk to about taking his car to the track comes back with the same "it's too nice to drive" or "worth too much" argument, regardless of how nice or rare/valuable the car *actually* is. I've actually had this happen a couple of times, with someone telling me they have a "real SS" car they got years ago, then I inquire about racing it, and get the standard "oh no, it's worth too much being a real SS car"...all standing next to our Y-Camaro awaiting my turn in the staging lanes!

Another example is a guy here in town who has close to a dozen old cars/trucks, all of 'em are pretty nice, but I've gotten this same run down from him as to *why* his '78 Pace Car Corvette hasn't seen the light of day in about 20 years...he used to drive it in the Christmas parade once every few years, but it's now dry-rotting in his shop, but "too valuable" to drive...people tucked those '78 Pace Cars away by the thousands, thinking they were gonna make a mint on the collector car market...oops! He's literally lost 20 years of driving that car, and for what, to *possibly* recoup his initial investment in 1978?

 

I read somewhere that a lot of guys are getting hurt with over priced musclecars that they purchased after Barrett Jackson tried to ruin the market. Some of these guys were borrowing from the equity in their homes that were going up in value. 'Easy Money', until the housing values tanked!!

I went to Barrett Jackson year before last. It made me sick to see how that auction game worked. They get these 'High Dollar' guys all liquored up, get their egos involved, and then its a matter of 'who's going to back down'. Granted these are 'car guys', but this little show on national TV makes the old man down the road think his 71 Camaro (that's rotting in the weeds) is worth auction result prices!

As far as the ego part, I know of a couple of guys that make really good money. They like cars, too. If you put them in front of a national audience with about 5 beers in them, they would pay ANY amount of money before backing down!! I bet you guys know of people like that in your circles, also. That's not true market value, just a show that's put on at Barrett Jackson with 'show' trickery. I witnessed it.

Scott

 

mcmanus2301....I'm glad you figured out the auction game, when you went 2 years ago to Barrett Jackson.

I can tell you that beer or no beer, few people now pay more than what a car is worth period. YES you are correct there USED TO BE a marked difference when the ESPN camera's went live a few years ago, but thats no longer true.

Nowadays whatever a car is worth, is pretty much what it will sell for, its simply who is present at any auction (I go to many different auctions throughout the year) and what they are willing to pay.

The people who borrowed at stupid high interest rates from their homes, to over pay for cars with money they shouldn't have had in the first place......are you defending them?? They took a risk and lost, just like anybody else. At least now they own what are hopefully nice cars.. One less musclecar to the crusher is a plus in my book.

I know despite my previous posts about.... that we are all the reason there even IS a musclecar market. Someone inevidently wants to turn it into the rich versus the poor argument. I got news.......The "High Dollar" guys dont need free beer to buy whatever car they want. If they really want it, they buy it period. Since money is not an object. In fact if you really knew the 'auction game' you would know that the wealthier collectors who have 30- 100 + cars a piece, all know one another and make sure that they are NOT stepping on each others toes or artificially driving up the price against each other. Seems even they would like a bargain ...imagine that.

You are correct again about them 'High Dollar Guys" all liking cars, I have never met a collector who didn't like what he was buying, and most are very knowledgable BTW....much more than then you would think and his reason for owning has nothing to do with where musclecar prices are going 80% of the time. It just doesn't matter. He loves cars just like you and me. He may not race them...but that is just like the majority of owners out there...no different than anybody else.

 

Ditto :TU:

 

This one is always fun to drag back to the top..........................................

So, where are we today? Who has got a deal lately, and who has lost their ever-lovin ass?
What did you buy for a song lately?

What were you forced to sell for a song lately?