There are classic car auctions year round all over the country. But there are two main “auction seasons” that have far reaching effects that have an impact on even those who do not attend. One is in August on the Monterey Peninsula in California. January is the other - in Scottsdale, Arizona and Kissimmee, Florida.
For at least the last five years, record sales prices (both total and individual cars), and almost constant media coverage have been the norm during both of these seasons. This has a tendency to make your average collector car owner think that their car is worth more than it really is. A 1969 or 1970 fully documented GTO Judge convertible selling in Scottsdale or Kissimmee last month for more than $200,000 does not mean that your base GTO Coupe is worth one penny more than it was a month ago. It’s not.
And speaking of constant media coverage – don’t put it past the television media to stir up the frenzy by highlighting one high sales price after another, while bypassing some of the more mundane sale results. In fact, if you watch the auctions on a regular basis, it’s a good idea to make sure that you’re actually watching the auction that you think you’re watching. It is not at all unusual for the media to replay last seasons, or last year’s auctions during periods when the current auctions have ended for the day. They segue into these repeats so smoothly that often you will not even realize that you are watching an old auction.
But every January, after the auctions end, we see a measurable “bump” in the asking prices of collector cars. Those who are in the market for a collector car at this time of year will often find themselves artificially priced out of the market, until the prices of this large inventory of unsold collector cars returns to normal a few months later. Of course the “rising tide floats all boats” philosophy does have certain applications in the collector car market. If, for example, you happen to be one of the lucky owners of a 1968 or 1969 L88 Corvette (only about 196 built), look for values to rise, as the entry price for a 1967 model is now 2.5 million to 3.5 million dollars. But this is by far the exception rather than the rule.
Transportation is another area of the collector car market that is directly affected by these auctions. Watch any of the major auctions on television, and eventually the cameras will pan across the parking lots that are filled with hundreds, if not thousands, of transporters ranging from single car flat-beds, to tractor trailers capable of transporting eight cars in enclosed luxury. Make no mistake. Transportation is a commodity, and when demand is high, so are prices and waiting times. The collector car that you just bought in California is going to cost more, and take longer to get back to Long Island than it would a month ago, or will a month from now. The same is true when you find the need to transport a collector car from New York to Florida in October. The transporters are filled with the cars belonging to the “snowbirds” who are fleeing the impending cold weather. Conversely, if you need to get a car from Florida to New York at the same time of year, you can practically dictate your terms as many transporters are either heading back north empty, or sitting in Florida trying to put together a load.
Almost all of the service businesses that support the collector car hobby also experience delays to some degree or another during these “auction seasons.” This especially applies to the insurance companies and the finance companies. If you’re a regular customer, the delays are usually not too bad. But for new customers, the processing of the paperwork will almost certainly take longer than usual. I know from firsthand experience that during auction season I tend to get flooded with requests for appraisals from customers seeking to finance or re-finance classic cars, or get insurance coverage for a newly acquired classic car. Appraisal requests for divorce purposes also seem to go up during these seasons. Coincidence? I think not.
It’s generally a good rule of thumb not to make important decisions in the heat of the moment…whatever that moment may be. This applies to classic cars as well. Whether buying, selling, insuring, financing, restoring, or investing, wait a little while until the “auction season” frenzy ends and some sense of normalcy returns to the market.