While global markets wobble and fears grow as economic slowdown is underway, you wouldn’t know it from looking at the upper echelon of the classic-car collecting world.
As the industry gears up for Monterey Car Week, which culminates with the Pebble Beach Concours d’Elegance next month, all eyes will be on the big auctions that punctuate the week of activities.
RM Sotheby’s, the world’s largest collector-car auction house by sales, previewed a select group of cars in New York City that will be going under the hammer on August 18 in Monterey. The five cars on display were under consignment from noted enthusiast Oscar Davis, who passed away early last year.
Those five cars alone from Davis’s collection are worth an estimated $40 million; RM Sotheby’s will auction off 22 cars from the Davis collection in total.
But that’s not all. The auction house estimates its total auction sales from Monterey will top $200 million, making it the biggest auction haul ever.
“This year, we have the potential to break records [at Monterey]. We can crack the $200 million mark in revenue,” says Michael Caimano, RM Sotheby’s specialist in an interview with Yahoo Finance. “This will be our largest Monterey that we’ve had so far. We’re fortunate enough to have amassed just some of the best cars in the world, a lot of once-in-a-lifetime opportunities for collectors to acquire.”
Indeed, some of those once in a lifetime cars on offer are the 1958 Maserati 450S, the Ferrari (RACE) 375 MM Spider, and my personal favorite — the 1938 Talbot-Lago T150-C SS Teardrop Coupe.
The Talbot, in particular, will likely set bidders back $9M-10M at auction, and despite the uncertain market and economy, Caimano says his clients aren’t likely to hold back.
“Personally, I haven’t heard that from my clients; actually, if you look historically when markets are down, that tends to be when money starts to flow into alternative assets, such as collector cars,” he says. “When we have cars like these, again, truly once in a lifetime opportunities to acquire, you’re not as concerned about the market, because you know in the long run, these will only continue to increase in value.”
Classic cars as an investment thesis has been around for some time and has gained momentum recently as auction values have soared. Just take a look at the staggering $143 million paid for a 1955 Mercedes 300 SLR just this past May.
And just like the variety of cars at auction, there are variety of buyers too — those that see the purchase as an investment or hedge and those that value the car for what it is.
“There are people that strictly collect cars for a place for an inflation hedge and as an investment. Then there’s true actual just car enthusiasts who want to attend concours events and win awards, or people who want to head to the racetrack and go for a podium finish,” Caimano says. “There’s a broad spectrum there.”
Caimano is one of those people who would race his classic cars for that podium finish. So it’s no surprise his favorite of the lot is the Maserati 450S, which he calls “the pinnacle of sports racing cars.”
Pras Subramanian is a reporter for Yahoo Finance. You can follow him on Twitter and on Instagram.
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