This 1930 Duesenberg Model J was recently sold for $2.6 million. It has passed… (Pawel Litwinski, Gooding…)
The collector car market, which slumped with the economy, is coming back along with the rest of the auto industry.
But don't expect to pick up a classic Tucker or Duesenberg without ponying up money like a Facebook executive. Many of these cars are selling for well over $1 million.
By one measure, the value of collectible cars has surged 33% since the depth of the recession in 2009. The Hagerty collector car blue-chip index — a Dow-like gauge that averages the values of 25 of the most sought-after collectible automobiles of the postwar era — climbed to $1.25 million from $940,000 in September 2009.
La Jolla resident Chuck Spielman has been watching the market, waiting for the best time to sell a 1930 Duesenberg so that he can purchase other cars for his collection.
After waiting out the recession, he sold the Duesenberg at auction for $2.6 million this year and completed a handshake deal to acquire another Duesenberg in a private transaction. Spielman wouldn't say how much he paid for the Duesenberg he purchased five years ago but said he made money on the sale.
Photos: The Duesenberg and nine other $2.5-million-plus collector cars
Spielman, a real estate investor, said he noticed the collector car market begin to turn up about two years ago, and he believes the rally was fueled by people who had money but had developed "distrust with the stock market and the real estate market. They began to see collector cars as a hard asset."
However, the buyers behind the gains were not speculators but rather "hobbyists with disposable income," Spielman said. "These are people looking to fulfill dreams that they couldn't when they were 18 years old."
More than a dozen collector cars have sold at auction this year for $2 million or more, including a 1955 Mercedes-Benz 300 SL Alloy Gullwing that went for $4.6 million in January and a 1948 Tucker Torpedo that was bought for $2.9 million.
"We are on an absolute boom right now," said Dave Kinney, publisher of the Hagerty Price Guide, which tracks collector car prices and produces the index.
The market started to pick up last summer when several "big players" started bidding up prices and has accelerated since then, said Shelby Myers, managing director of the West Coast division of RM Auctions.
The collector car business is rapidly reaching new highs, Myers said.
"Only in 2007, just before the financial collapse, would prices be near what these cars are going for now," Myers said.
The cars selling for megabucks this year represent a wide variety of eras and designs, including rare American classes and a coveted group of race-ready Porsches.
Ferraris always seem to bring big dollars, said Dietrich Hatlapa, chief executive of Historic Automobile Group International.
One notable sale was a 1959 Ferrari 250 GT LWB California Spider that went for $3.9 million at a Gooding & Co. auction in Scottsdale, Ariz., in January.
There was the 1912 Oldsmobile that sold new 100 years ago for $5,000 — a fortune at that time — and sold in February by RM Auctions for $3.3 million. The 60 horsepower car was among the most prestigious autos when it was built. The Oldsmobile disappeared into history when the brand was dropped by General Motors in 2004.
The Tucker Torpedo that sold in January in a Barrett-Jackson auction was one of four left out of the 51 built by Tucker in 1948 before the company folded the following year.
Conceived by automotive entrepreneur Preston Tucker, the Torpedo had what at the time were considered innovative, cutting-edge features, including a rear-mounted engine, disc brakes, fuel injection, a padded dashboard and the famous "Cyclops eye" third headlight.
Because of the prices paid, this is an arena populated by wealthy individuals. Hatlapa, however, noted that the market isn't limited only to million-dollar cars.
At a February auction in Paris, a 1965 Citroen 2CV — a minimalist utilitarian vehicle designed for post-World War II France that looks like an old Volkswagen Beetle with bug-eye headlights — sold for 57,000 euros, or about $75,000.
Although it is almost 50 years old, this 2CV "had only 113 miles on the odometer and was completely unchanged and original as it had been delivered," Hatlapa said.
Two trends are fueling growth of the collector car market.
There are more rallies, car shows, television shows about auctions and hot cars and generally more activities where people can take their vehicles, said Myers of RM Auctions.
Moreover, the cars have performed well as investment vehicles, Kinney of the Hagerty Price Guide said.
"A Mercedes 300 SL Gullwing is worth pretty much the same around the world once you adjust for tariffs," he said. "If there is trouble in the European market, you can sell it in Asia or North America. And unlike a real estate asset, it is transportable."
Unlike precious metals, stocks, bonds and even most art, rare autos have emotional qualities that other investments lack.
"These are three-dimensional objects," said David Gooding, who heads the Gooding & Co. auction house in Santa Monica. "You can sit in them, touch them, you can fire them up and hear their sounds. People really get emotional about cars."
But how long this car rally continues is a question.
"I see prices continuing to rise but not at the feverish pitch we have seen," Myers said. "There's a lot of new wealth being created in emerging economies, and those collectors are starting to come on."