Vendor drops $10 million by knocking back €20 million bid
Last week we forecast that the sixteenth car in history would sell at auction for more than US$20.0 million. It didn't happen, but what did occur was even more astonishing. The 1964 Ferrari 250 LM had been to auction in Paris in February where a bid of €20.0 million was rejected and the car passed in. Last week, the car was sold for €15,771,200 (US$16,867,298) including buyers premium.
Had that €20 million been accepted in February, the total price of the car would have been €25.0 million with the 25% buyers premium added, which amounts to a grand total of USD $26,977,500 - and it would have been the seventh most valuable car ever sold at auction.
Hence the decision to try to get a few hundred grand more back in February ultimately cost the vendor USD$10,110,202 and place in automotive auction history. The entire back story, background to the LM and the history of the $20 million automobile marketplace was told in our story just prior to last week's auction.
Buying and selling collectible cars is not as infallible as it looks, despite what we concluded last week when we took a deep dive on the forever climbing prices of Ferrari hero cars such as the F40, F50 and Enzo.
The big winners and losers of 2023 so far
The above six cars are the biggest winners and losers at auction so far in 2023. That is, they are the cars we can identify as having the three greatest net gains and three greatest net losses based on the prices they have fetched this year and the prices they fetched last time they were at auction. Read on to find out that not everything is as it seems, and to find out just how hard it is to make money buying and selling classic cars at public auction.
The first car off the rank is this 1959 Mercedes-Benz 300 SL Roadster that sold for EUR €1,748,750 ($1,925,898) at RM Sotheby’s on 1 February 2023 during the annual Rétromobile pilgrimage of “old timer” automobile enthusiasts. Just as France once dominated the automobile industry, it now dominates the classic car industry with the Retromobile exhibition and trade show.
The car had been purchased for $1,155,000 at Gooding & Company’s Scottsdale Auctions on 30 January 2016, so the owner possessed the car for almost exactly seven years, and at first glance, was in the black to the tune of $770,898.
Even though the car had minimal use since a full restoration by marque specialist Precision Automotive at the time of the Gooding & Company sale, the new owner quickly passed the car onwards and a second new owner (the vendor in Paris) decided to invest heavily in the Mercedes-Benz roadster. It is easily possible to over-capitalize in an automobile, just as can be done with a house.
From the RM Sotheby’s auction report: In 2016, the car was sold at auction prior to being bought by the consignor, who immediately commissioned a second no-expense-spared restoration that was carried out by AutoRiparazioni Stefano Coratelli and Kessel Classic in his native Switzerland. A staggering €700,000 was lavished on the 300 SL Roadster between 2016 and 2021 to bring the car to concours standard, including full restoration of the engine and all mechanical components, complete replacement of the electrical system to factory specification, and sourcing of all correct spare parts and materials. A further €49,000 of upholstery work carried out by Selleria Santarelli, including a full re-trim in Creme leather—one of four possible combinations for the 1959 model year—and replacement of the hardtop headlining with correct light grey material, perforated exactly as the original. The car is accompanied by a factory hardtop, a full set of books, a Karl Baisch luggage set, a sales brochure, and toolkit, in addition to samples of the materials used in the restoration.
So the amount spent on the car between 2016 and 2021 more than accounted for the increased sale price but it should also be taken into account that when one of the big automotive auction houses such as RM Sotheby’s, Gooding & Company, Barrett-Jackson, Bonhams, Artcurial, Mecum et al sells a car, they add around 10-12% to the hammer price (the buyers premium) and they take 10-12% from the hammer price as the seller’s fees, meaning that around 20-25% of the total price that gets reported by the media goes to the auction house.
Hence despite selling the 300 SL Roadster for $770,000 more than was paid for it, after spending at least $800,000 on the car, plus the costs of getting it back to Europe and keeping it in a climate-controlled garage in Switzerland, plus losing more than 20% of the sale price on top when it sold makes the cost of ownership of this car a frightfully expensive exercise. Sadly, we don't know how many miles the custodian was able to enjoy in the roadster, and perhaps the vendor might not want to know the cost per mile, but we suspect it wouldn't be pretty.
The price difference between the two recorded auction results for this 1931 Duesenberg Model J 'Disappearing Top' Convertible Coupe is $775,000 (or 22 percent), over a time period that is just short of eight years. Much of the following information comes from the always extensive RM Sotheby's auction description.
The car is one of the many Duesenbergs with a stellar provenance, having been part of the famous Pacific Auto Rentals fleet that serviced the film industry from its Hollywood location. As such the car appeared alongside Joan Crawford and Bette Davis in the 1962 movie Whatever Happened to Baby Jane?, alongside sex symbol Jayne Mansfield in publicity photos, in the TV series Bring ‘Em Back Alive, and in the movie Gable and Lombard. The Pacific Auto Rentals fleet was sold to the Imperial Palace of Las Vegas, which cherry-picked the cars and sold the remainder at a now-legendary auction on the lawn of the Ambassador Hotel on 18 August 1995. The late, renowned collector Oscar Davis successfully bid on J-395, which he had refinished by Mike Fennel in cream with a maroon chassis before, ironically, selling it back to the Imperial Palace, reportedly as the 50th Duesenberg in their vast collection. Soon thereafter it was inspected by the ACD Club and awarded Category 1 Certification.
Following the dispersal of the Imperial Palace fleet in 1998, J-395 was purchased by respected collectors and well-known friends to many, Chris and Kathleen Koch. The Kochs reportedly invested some $500,000 in restoration of the Model J, with a full mechanical rebuild undertaken by the acclaimed Duesenberg specialist Brian Joseph’s Classic & Exotic Service of Troy, Michigan, and cosmetic restoration and final assembly by noted craftsman Steve Cooley of Tavares, Florida. Afterward the car was judged First in Class at the Pebble Beach Concours d’Elegance in 2005, the first of no fewer than 18 victories it would achieve in the next two years. In 2008, the Model J became part of the legendary Andrews Collection in Texas, where it resided alongside several other outstanding Duesenbergs and many other superb Full Classics.
It's the final paragraph of the RM Sotheby's description that tells the full tale: J-395 was acquired by the current owner in 2015, and it was soon submitted to Mr. Joseph’s Classic & Exotic Service for comprehensive mechanical sorting and cosmetic improvements, including proper adjustments of the valve and cam timing, ensuring that all gauges function, installing new front wheel bearings, and properly rebuilding the Watson Stabilators. Most importantly, the car was fitted with a high-speed ring and pinion, so that, true to the Duesenberg mystique, it is a car which likes to go fast. It remains in fine overall condition, with an impressive history file testifying to its provenance and to its excellence as one of the best surviving Murphy “Disappearing Top” Convertible Coupes.
The cost of the attentions of Mr. Joseph’s Classic & Exotic Service would have been available via invoices prior to the sale of the car and would now be with the new owner. Given those not inconsiderable costs, plus the approximate 20 percent auction fees, this car would not have facilitated a profitable ownership, nor would that ownership have seen many road miles - the odometer in the two sets of images appears to have hardly moved at all.
With a price increase of $753,000 over seven and a half years, representing an 83% return on investment, this again looks like a winner, and in terms of the owner finally possessing one of the finest examples of a near perfect Shelby Cobra in existence, it is, but as a financial investment, maybe not.
From the RM Sotheby's auction description: Since moving into new ownership, CSX 2208 has been treated to a three-year full restoration to factory specifications by Classic MotorSports of Northville, Michigan. Colour Restoration of Loveland, Colorado was tasked with bringing the aluminum body back to factory specifications. For two years, Colour worked tirelessly massaging the chassis and removing old repairs before spending over 300 hours block sanding the body to ensure a mirror finish. The car was then cloaked in its rich factory-correct finish of Vineyard Green with the interior retrimmed in Saddle leather upholstery. Reams of invoices and receipts document the meticulous process from start to finish. Copies of the restoration documents and an original AC Cobra ownership manual are included in the sale.
Only the owner will have access to the "reams of invoices" now, but having an artisan spend 300 hours (that's around two "man months") just sanding the body, on top of "tirelessly massaging the chassis and removing old repairs" is an expensive pastime. We seriously doubt that this ownership was profitable in financial terms, though as an exercise in experiencing the joys of an atom-perfect factory spec thoroughbred, it was no doubt a zen experience for the vendor.
Quite clearly from the three examples above, chasing automotive perfection isn't cheap.
Authenticity is particularly prized by automotive collectors so this 1939 Mercedes-Benz 540K is to some degree a victim of fashion in that it was once a regular occurrence for desirable base cars such as the 5.4 liter Mercedes-Benz behemoth to be updated with the most stylish body. This 540 K started life with a Cabriolet B body configuration, one of many different body styles offered by the Sindelfingen Mercedes-Benz body works, but in changing to a Cabriolet A body, the resale value was always going to be problematic. It was! It would appear that the prior owner had a wonderful time with the car, showing it regularly and winning many awards, including Most Significant Mercedes-Benz at the 2008 Meadow Brook Concours d'Elegance, Mercedes-Benz Star of Excellence at the 2009 Amelia Island Concours and Best in Class, European Class Prewar at 2011 Amelia Island Concours. The vendor in the 2023 auction dropped well over a million for the privilege of seven years of custodianship.
With a net loss of $682,500 before auction fees, you might be asking "what happened" with this "Lusso" but a quick look at the GlenMarch web site indicates that the GT/L auction prices peaked in 2014 and this particular car was one of the highest priced ever sold. Some cars go in and out of fashion, and despite the GT/L being one of the most beautiful and rare Ferrari models, with only 350 examples built, the collecting game is not for the feint of wallet.
Even by Ferrari standards, the "Daytona" is a celebrity model that was given the name by the media after Ferrari's 1-2-3 finish in the 1967 24 Hours of Daytona. Ferrari refers to it as an "unofficial" name, but the catchy name and the antics of Dan Gurney and Brock Yates driving a Daytona to win the inaugural (and highly illegal) Cannonball Baker Sea-To-Shining-Sea Memorial Trophy Dash, helped it become a cultural phenom. The pair won with an average speed of 80.1 miles per hour (129 km/h), completing the distance from New York City to L.A. - 2,876 miles (4,628 km) - in 35 hours 54 minutes. Gurney was later quoted as saying "We never once exceeded 175 miles per hour."
Being such a prominent and desirable Ferrari, the company over-produced and the generally accepted total number of Daytonas is 1,406 units, which explains why only a few of the model have ever sold for more than USD$1.0 million. Included in that number are around 121 factory-made spyders (correct nomenclature is actually GTS/4) - sources differ on the exact number but as the sexier version of a prominent and desirable model, everyone agrees the spyder was under-produced, which made for high auction prices and such demand that people began buying Daytonas and cutting the top off them so they could have a Daytona Spyder, with that marketplace still sitting at a level well above the average family home.
The marketplace appears to have moved on from its peak in 2014 and this car was one of the two highest priced genuine Daytona Spyders ever sold at auction, which left it no-where to go but down. At $2,535,000 it still managed to land a second spot in the five highest prices ever paid for a Daytona Spyder, but lost $765,000 before you take into account auction fees. Such is the cost of playing in the big league and driving and owning one of the finest and most desirable collectible cars.
Nearly all the cars on this list have cost their drivers more than $10,000 per mile to drive.