The 2012 collector car auction season is about to kick off, as some of the major collector auction companies are setting up shop in the Phoenix/Scottsdale, Arizona area for some serious wheeling and dealing: Barrett-Jackson (Jan. 15-22), Gooding and Company (Jan. 20-21), RM Auctions (Jan. 19-20), and Russo and Steele (Jan. 18-22). Elsewhere, Mecum Auctions kicks of its season with more than 2,000 vehicles in Kissimmee, FL (Jan. 24-29).
But is collecting classic cars a good alternative investment right now? According to McKeel Hagerty, CEO of Hagerty Insurance, the largest provider of insurance for classic and vintage cars in the United States, "The past few years for the classic car market has had its volatility in certain segments. With very few exceptions, classic car values were on the rise until 2008." But then the classic car market, like the rest of the economy, really put on the brakes.
Hagerty says cars that saw the most appreciation up to 2008 have lost some value, "especially American Muscle cars and Corvettes." Now, however, prices are on the upswing again, with the upper edges of the classic car market equaling or exceeding records set in 2008.
Hagerty's "Blue Chip" Index, which averages the values of 25 of the most sought-after collectible automobiles of the post-war era, has substantially outperformed the Dow Jones Industrial Average and home prices over the past five years, with a nearly 100-percent return.
Another barometer - the "Affordable Classics" Index, which consists of 12 cars priced under $30,000, has returned about 10 percent over the same time period.
For those looking for the next hot area, McKeel Hagerty expects classic pickups - from the 1950s and 1960s - to really pick up in value.
Just like traditional investments, you will incur operating expenses such as maintenance, repairs, insurance, registration and storage. But classic cars provide something very special that you don't get from stocks, bonds or other paper investments. And that's the ability to turn the key, step on the gas and go, go, go.
Click through for a look at the interesting (and quirky) cars you will see cross the auction block for a wide-range of investors. Some of the have estimated selling prices provided by the auction house; some don't. For the latter group, we've established a price based on Hagerty Valuation Tools, NADA Guides and VMR Auto Guides. (Look for actual sales-price data as the season unfolds.)
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By Robert Melstein