The Staff of Motorsport Marketing
The Staff of Motorsport Marketing Writer
10/4/17 2:37 p.m.

Story By Tim Sharp • Photography By Dirk De Jager

Are they the future of classic car ownership, or are they harbingers of the hobby’s demise? Are they unfair, or do they actually level the playing field? Should you beat them or join them?

For better or for worse, classic car investment groups are an established presence at today’s auctions. Their basic strategy is easy to grasp: Pool money, buy a top classic car at auction, allow the car to rise in value, sell the car, split the profit.

What’s less clear is how these groups are influencing the market–and even the hobby as a whole. Some people blame them directly for the recent escalation of hammer prices on rare Ferrari and Mercedes-Benz classics. Others say they’re just one of several factors pushing values toward the stratosphere.

Whatever the case, it’s important to know who these new players are, why they’re here, what they’re buying, and how they may affect other bidders.

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WilD
WilD Dork
10/4/17 3:17 p.m.

It's hard for me to see the "investment groups" as anyhing but a negative from an enthusiast standpoint.  It isn't even about the cars, it doesn't matter what they are, becuase they have just become another instrument to transfer waelth around.  They can't be used as cars at that point, so they basically cease to exist.

The0retical
The0retical SuperDork
10/4/17 4:10 p.m.

I wonder when the bottom is going to fall out of that market, it has to be coming in the next decade-ish.

There are certain cars, like Carrol Shelby's personal Super Snake and GT-40 P 1015 Mk. II (also J5 and GT40P/1075 ), which will hold their values simply due to their history. I'm not sure that buyers will give a damn about a 68 'cuda which was 1 of 68 in a given color combination after that time frame though.

spin_out
spin_out HalfDork
10/5/17 8:16 a.m.

I remember a story from the 1980's of Ferrari values going way up because of investors buying them...because their values were going way up.  The real guy owner sold his car for around a million dollars because the money was just too good.  About 3 years later the bubble burst, and he bought his car back for around $200,000.  

Prices should go up because of supply and desirability.  Prices should Not go up because......prices are going up.  And that's what investor groups do.  

Pete Gossett
Pete Gossett MegaDork
10/5/17 11:23 a.m.

Different field, similar concept: years before eBay and the internet changed(ruined) the antique business, someone went around buying up all the Griswold cast iron cookware they could find. Then they wrote and published a price guide for it, and profited off the results. Eventually the bottom fell out of that too, but largely because the internet proved how common many "rare" pieces actually were.

chandler
chandler PowerDork
10/5/17 9:28 p.m.

A version of This is happening in the world of Hot Wheels as well; cars that are very desirable I.e. The Toy Fair Porsche RSR is seeing $700 price tags as speculators buy them all up and sell lotteries on Facebook/instagram. Some cars that are fairly common like the Vintage Racing Datsun 510 are seeing $300 because of this. The idea is that you can't or won't pay $700 for a hot wheels car that was made in the thousands but you will take a one in 50 shot at $15 each... if you win you win, if you don't win you aren't out much. Same as these buying groups, on a different scale....

maseratiguy
maseratiguy Reader
11/15/17 9:37 p.m.

I just don't like it when Non-enthusiasts get involved in anything just because they are looking to make a $. Then again, maybe I should sell "shares" of my Giulia and offer people the "hope" of a big return when I sell it, (I just wouldn't sell it). I could use the money from selling the shares to fix it up more an dmake it more "valuable" thus increasing the share price....and sell more shares!

.....I may end up hanging out with Madoff, but free medical, meals, lodging, and if the prison has a good woodworking program, I'll still have something I like to do! 

GTXVette
GTXVette Dork
11/16/17 6:39 a.m.

 

Being a Poor SOB I can only Hope they Lose their Butts. 

When there is Only 1 Like the Salvitore Mundi  That's 500 years old, an Investment Group Can't wait it out.

When several have been Made It's Like Land .....They Just aren't Making anymore.

NOHOME
NOHOME UltimaDork
11/18/17 11:39 a.m.

Has zero affect on any part of the hobby I play in.

wannacruise
wannacruise New Reader
11/18/17 6:48 p.m.

WilD Dork

Oct. 4, 2017 3:17 p.m.

"It's hard for me to see the "investment groups" as anyhing but a negative from an enthusiast standpoint.  It isn't even about the cars, it doesn't matter what they are, becuase they have just become another instrument to transfer waelth around.  They can't be used as cars at that point, so they basically cease to exist."

Agree whole heartedly.

 

wannacruise
wannacruise New Reader
11/18/17 7:09 p.m.

maseratiguy Reader

" I just don't like it when Non-enthusiasts get involved in anything just because they are looking to make a $. "

I feel the same way.  But,  there is a lot of discretionary money out there chasing after hobbys and play things. It seems to me that many people who can afford it really aren't into the car scene it is just another social scene to be connected with.  Many of them go to events and don't even pay any attention to what is going on at the event. But I must admit, everybody has the right to spend their money where they want to.  And even though the money has a tendency to willow out the market it also, because of the influx of cash, has helped to create an economy where everyone really has a chance to benefit from new products and services.  The transfer of technology and quality of parts in the aftermarket is phenomenal today.  

 

 

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