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The Car Guys

They excel at finding, buying, selling and knowing everything there is to know about the go-go collector car market. But even they're wondering when the bubble will burst.

June 10, 2007|Ann Herold | Ann Herold is managing editor of the magazine.

That 1996 Honda Accord is part of the story, really, and it's a doozy. It's the car Raymond Milo was driving two years ago when he pulled up at the house in Bakersfield, to which he had been invited, finally, to look at the doorless, seatless, hoodless, engine-less carcass of an early 1950s Deutsch-Bonnet that the owner, a woman who had inherited it from her husband, was trying to sell.

Her son-in-law had contacted Milo months before, probably because of the ads he runs in car magazines seeking obscure American and European race cars. The telephone call caught Milo at the airport in Singapore. When he declined to say what the car was worth sight unseen, the son-in-law began phoning around, and everyone else declined to say what the car was worth--and advised him to call Milo. This, of course, got back to Milo, who waited patiently until the son-in-law contacted him again and said, we'd like you to come out and look over the car.

Even before Milo got there, he knew this car was unique. From its chassis number, he realized it was one of a tiny number of special body competition roadsters built in the 1950s by the French company. Suddenly he was staring at one. He was also trying to read the seller's face, and he could see the mistrust, that she and her son-in-law were afraid they would sell the car for too little. Milo, who had brought cash and told them so, asked what they wanted for the car. They said $4,000. "I know if I say OK, they're going to say, let us think it over some more," says Milo. "I do my best Stanislavsky school number. Four thousand dollars? What do you think you are selling?"

After a long conversation, during which he made the point that it would cost him $200 just to haul the car back to L.A., they settled on $3,800. Actually, he paid $500 to have it trucked, but that's OK. The next day he sold the Deutsch-Bonnet to a Japanese collector for $44,500. And he would make additional fees overseeing the car's restoration in Paris. And that's not all.

Just before the French were to make the replacement doors, the seller called with the news that she had found the originals. "I said, 'Would you like to have lunch with me at 12 or 12:30?' She said, 'I have no time for lunch, but you're welcome to come for the doors.' I sent her a bottle of champagne and a thank-you card afterward." Then he made $7,000 selling the doors to the collector.

If this sounds ruthless, it's not. Milo is one of the few people on the planet who knows the importance of this car, that it was eligible to race at Le Mans and had actually raced twice at Sebring, winning its class one time and coming in second the other. This makes it of enormous value to an even smaller number of people who have the desire and the money to buy it. Without him this car might never have acquired its heavenly new life.

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The May 2007 Hemmings Motor News is an inch thick. The bible of the collector car industry, it's filled with thousands of vehicles for sale. You would think America is car crazy.

Car collecting gained real speed in the early 1970s, says Milo, as Americans realized that a Corvette or a Shelby Cobra from the 1960s was infinitely more interesting than anything Detroit was churning out. By the 1980s, collecting cars was a full-blown passion, with the turbocharged prices to go with it.

Then the market hit a tough patch in the 1990s. Milo, a mechanical engineer who owned a publishing company before devoting himself to car dealing, survived, emerging from the slump with less of a desire to compete against the masses dealing in Bentleys and Ferraris and a wish to specialize in the vintage race cars--the Elvas, Delahayes, Auburns, Dorettis--that had gained a monied following. He also realized that for him these cars had a certain indescribable beauty. "The market follows the intrinsic value of a car, which is nebulous and intangible," he says. "You can't define it, but you know it when you see it. It's hard to put into words. I deal in cars that have that."

His sense of what's collectible works about 70% of the time, he says. "The rest of the time I sweat it." Looking back on the early '90s, he shudders. "But now we have a completely different market," he says. "I would say that since 2001 the market has gone mad. I used to say nothing can go up forever." He bites down on the unlit cigar he carries since he quit smoking March 30. "But if I had bought every car that I wanted to in 2002, I would have doubled or tripled my money by now."

He likens it to the Southern California real estate market. His house in the Hollywood Hills, which he bought in 1977 for $75,000, is now surrounded by multimillion-dollar properties. "I don't know who these people are, but there seem to be a lot of people with a lot of money. And they're not buying these cars as investments.

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