Ferraris and Bidding Wars in the Desert

For classic car lovers escaping the winter snows, it doesn’t get any better than this year’s Scottsdale auctions, with collectors spending $159.6m to buy about 2,300 cars. As always, Barrett-Jackson was the big player with sales at $68.5m, Gooding sold $35m, while RM was close behind with $31m in sales. Russo and Steele sold a respectable $20m while Silver Auctions sold $3.7m and new kid on the block MotoeXotica sold $1.3m.

This year’s total easily beat the $126m in sales of 2010 and was close to the all-time high of $167m back in the boom days of 2007. Ferrari enthusiasts could dedicate their time to only one or two auctions, with the die-hard aficionados at Gooding or RM—or bouncing back and forth between the two.

You got that loving feeling
With the economy recovering and the Dow Jones Industrial Average back to 12,000, the car market has again got that loving feeling. Collector cars are concrete assets that can be easily transported and instantly converted into other currencies—and whose values should beat the specter of looming inflation (or the possibility of further deflation). Today’s buyers are not hesitant to step up to buy the right car. While cars are not as liquid as stocks or bonds, the right car has far greater bragging rights.

Barrett-Jackson has a very different business model than RM, Gooding or Russo and Steele. Part of Barrett-Jackson’s total revenue stream is the admissions charged to more than 200,000 spectators—and fees charged to several hundred vendors. Barrett-Jackson offered only seven Ferraris, with a 2005 575 Superamerica, s/n 142550, being their high-end Ferrari sale at $330k, which was about $100k over market for a nostories car. If you’re a Ferrari aficionado, you were there for the show, and not for the cars.

Gooding leads the charge
Gooding & Company sold 121 of 131 lots for $35m, with 16 Ferraris, including eleven supercars and race cars from the Benny Caiola estate. While most Montezemolo-era Ferraris are depreciating assets, the best-of-the-breed of the modern cars did well, with FXX s/n 146357 setting a new sales price for this model at $2.1m and F50 s/n 103922 selling for $814k. As always, some cars sold below market, with 333 SP s/n 028 selling at $781k, which surprised this author as 333 SP s/n 032 is being offered at $995k and the owner has turned down $875k.

As always, Enzo-era Ferraris did well, with 250 Lusso s/n 4411GT selling for a very strong $720k, 275 GTB short nose s/n 6751 sold for $797k, multi-platinum winning 275 GTB alloy long nose s/n 8053 sold for a very impressive $1.4m, and 365 GTS/4 Daytona spyder s/n 15383 sold for a very strong $1m.

Dinos sold well, with “L” model 246 GT s/n 00690 selling for $170k, 246 GTS s/n 7792, a very “average” Dino, sold for $159k, and 246 GTS s/n 5480 sold for a strong $192k, a nice change from the $105k it sold for at Pebble Beach in 2003.

RM has a good weekend
At the Arizona Biltmore Resort, RM sold an impressive 172 of 180 lots for a 96% sale rate, and 1949 Ferrari 166 MM s/n 0024M was the high sale at $1.9m. The owner of this 166 MM had dedicated massive time and energy to the Ferrari Classiche process, but without the little red book yet being delivered (from Classiche, not Chairman Mao), the final price was below expectations.

The Touring-bodied 166 Inter Berlinetta s/n 043S sold for a mere $412k, reflecting the user-cruel nature of these very early Ferraris. F50 s/n 99999 sold for $742k, and the Reggie Jackson 365 GTS/4, s/n 16835, sold for $880k, both below expectations. The 500 Superfast s/n 5989 sold for $935k, a strong sale but well below what the owner paid just two years ago. RM also sold 2004 360 Challenge Stradale coupe s/n 138749 for $88,000, another below-market sale.

The weekend’s surprises
The weekend’s highlights were a Hemi ’Cuda convertible selling at Russo for a staggering $1.7m and the Mercedes Gullwing selling at RM for an equally staggering $1.375m. The most eye-opening Ferrari sales were the multi-platinum-winning 275 GTB alloy long nose s/n 8053, which sold for a very high $1.4m at Gooding, and Barrett-Jackson’s sale of 575 Superamerica s/n 142550 at $330k.

Our clients have already started to point to the sale of the Hemi ’Cuda at Russo, to the Gullwing at RM and the alloy 275 GTB at Gooding as the new market standards, but that is simply wishful thinking.

RM’s Gullwing sale at $1.375m was an example of a couple of Type A buyers who wanted the same car, on the same day, and had the egos and the bank accounts to back it up. RM sold this exact same Gullwing at Monterey in 2008 for $770k “all done,” and time has not helped what is rapidly becoming an older restoration.

As for the 275 alloy sold at $1.4m, the same car was offered on the open market only four months back for $200k less, so again big egos and big bank accounts ended in an over-market price. As for the 575 Superamerica sold at $330k, these are really commodities, not collectibles, and I can only hope the buyer enjoys driving his new Italian toy.

The adrenalin rush
In the auction world, rapid-fire bidding and the adrenalin rush of a one-minute decision to buy or pass introduces a rush of drama and emotion into the equation—and so can be very volatile. If several well-heeled Type A buyers want the same car, at the same place, on the same day, big egos and big bank accounts can result in some very high prices. Conversely, because the crowd is usually limited to a few thousand people on that weekend, if no one really wants to take a certain car home on that day, the bidding and final sale can be well back of market.

Come for the show
While most of the cars at auctions sell at market prices, sellers go in the hope that they just might get lucky and get that elusive over-market price, as did the Hemi ‘Cuda, the Gullwing and the 275 GTB alloy. It’s also possible that the right buyers just aren’t in the room—or on the telephone—and the car brings a below-market price, as did the 333 SP or the Reggie Jackson 365 GTS/4 Daytona Spyder.

Next January, head to where the sun and the cars are: Arizona. Enjoy the show— but if you choose to be a buyer, be sure to educate yourself on the current market, and take the time for due diligence before raising your hand.