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| Passion Investments: Autos |
Revered Racers
Michael Verdon
11/01/2004
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Of course, most storied racecars do not fetch millions, but, in
general, prices continue to increase. According to David C. Gooding, who runs
Gooding & Co., an auto auction house in Santa Monica, Calif., the value of
the Ferrari 275 GTB has risen by $100,000 in the past year to $300,000
(depending on the specific model). The 250 GT Lusso has doubled in value to
$250,000 in two years. While Ferraris tend to be the leading indicators of the
relative health of the collectible car market, many American-built racecars,
such as the Ford GT40 and Shelby Cobra, are also faring well. “A 1964 289 Shelby
Cobra that would have fetched $100,000 three years ago would go for $250,000
now,” Gooding says. “These cars were sleepers for years, but vintage racers
figured out it’s one of the quickest ways to get around the track. If the engine
blows up, you can always replace it with a cheap Ford V8—unlike Ferraris, whose
matching engines are treated like the Holy Grail.”
 | | 1956 FERRARI 500 Testa Rossa. It was sold at a recent Christie’s auction. (Photograph courtesy of Christie’s Images LTD., 2004.) |
Some aficionados worry
that the vintage racecar market is becoming overheated. Roush recalls that in
the late 1980s, nonenthusiast speculators pushed the price tags of preowned
Ferraris into absurdity. “Almost anything with the word ‘Ferrari’ on it went up
in price,” he says. “But many new buyers didn’t know a Ferrari from a Ford. We
had a ‘greater fool’ theory. People would pay foolish prices believing there was
a greater fool out there who would pay even more.” The curve reached its apogee
in 1990, when a Japanese collector paid $16.5 million for a Ferrari 250 GTO.
Three years later, he sold it for about $3 million. Industry experts currently
value it at approximately $7 million.
High-Octane Assets
Roush believes the current market is actually much more
stable because passionate collectors, rather than speculators, fuel it. He does,
however, offer one caveat: “These are used cars, and all used cars depreciate
until they become old enough or rare enough to be collectibles,” he says. “If
you talk about a handful of 250 GTOs or 250 Testa Rossas, they are unique—but
the exception to the rule.”
To provide a more judicious perspective on the
sports car market, Martin’s magazine has assigned investment-grade values to
different models. “At the top of the value equation are cars that have won races
and can be authenticated,” he explains. “They are called ‘no stories’ cars
because there is no question that they have the correct motor, bodywork and gear
box.” The second tier features winning cars that have questionable
histories—cars that often have been reconstructed from the original chassis,
but without the original motor or other essential parts. “These are much more
common, because if it was a successful car, it had to be run hard—and many
crashed,” Martin says.
 |  | | TOP: 1959 Ferrari 250 GT Long Wheelbase California Spyder. Bottom: 1947 Ferrari 166 Spider
Corsa. Both were sold at a recent Christie’s auction. (Photographs courtesy of Christie’s Images LTD., 2004.) |
He estimates that Grade A investment cars number
between 5,000 and 10,000 around the world, and 50 come up for auction each year;
another 200 change hands privately. Most Grade A cars have doubled in value
since 2001, Martin says, and Grade B cars have seen asking prices rise by 50
percent. Martin’s website, www.sportscarmarket.com, also boasts a
database of 40,000 chassis numbers and histories of different vehicles to help
buyers authenticate cars. “The nice thing cars have that the art world doesn’t
are chassis numbers and stampings on the motors,” he says.
Steve Tillack, who
campaigns five vintage Formula One cars as well as 10 other vintage racecars,
and operates a restoration shop in Redondo Beach, Calif., likens a vintage
racecar to a racehorse. “You have to take it out and run it hard,” he says. “If
you leave it in the corral, it’s going to rot.” As far as hoping for a financial
return on his pastime, Tillack adds he would “put a line through the word
‘investment.’ The cars hold their value, but it costs money to race. The cost of
running it will far outweigh the value of appreciation.” Tillack says that
prepping a Formula One car for a race such as Monterey could easily run more
than $10,000 for mechanics’ fees alone. There are additional fees for test time
on local tracks to make sure the car is race-ready, plus transportation and
support costs associated with the race. “ ‘Budget’ and ‘racecar’ should never be
used in the same sentence,” he admits.
Despite such expenses, most devotees
are upbeat about the vintage racecar market. “I think this hobby has a great
future,” says Gooding, who has seen a spike in his auction business, much of it
due to the popularity of websites such as eBay, which does a brisk trade in
vintage cars. “Sure, there are better investments now, like real estate. But
when is the last time you drove property around a racetrack at 120 miles per
hour?”
Coates says he did not buy his Ferrari primarily as an investment, but
he firmly believes he will never lose a nickel on it. “I just think of it as
taking my money and making it less liquid,” he says. Coates recently received a
purchase offer from Japan, where collecting has gained momentum. “It wasn’t
enough to make me blink.”
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