Walking the high wire? Watch out!
04 August 2020 2 min read 4 images
My job is to try to objectively report the market for the benefit of enthusiasts and collectors. Sometimes I use a light-hearted tone or digress onto subjects that for some may appear slightly off-topic. As a matter of fact, I love this world and this job and often talk about it, on a scientific basis, in a loose and informal way to avoid sounding boring and monotonous (at least, that is my intention). All this to say that there are occasions when objective reporting might come across as severe. But those who follow us would be much more severe on us if we chose to do otherwise. And that’s exactly what I’m required to do with the RM Auction “Open Roads – North America”, an online event organized between 23rd and the 30th July, which didn’t go well. Accordingly, just like in any field of work, it’s important to learn from our failures so that we don’t repeat them.
Given that RM has always handled its online auctions exceptionally well, transforming them into a recognised success, one has to wonder whether this euphoria tricked them into believing that everything was easy. A quick glance at the catalogue was all it took to raise some doubts:
First of all, the number of cars, 89. Why is the number of cars important? Well, as virtual events give you infinite space (and fixed costs close to zero), it’s tempting to “throw in” almost any car that comes your way, as the financial risks are so low. And this in itself is dangerous. Then the average price: $77,100 per car, a decidedly reduced figure, which comes to blows with the number of lots on offer: usually, either you bet on a large number of cars on sale or on fewer cars of higher quality. Offering 89 cars at $77,100 each meant aiming for $6,862,000 (I know that 89 times $77,100 is a little less but the total value on offer was $6,862,000). Too little to believe that RM was truly committed.
And the result was so embarrassing that not even the very efficient press office could find something to celebrate and almost “hid” the existence of this auction. A quick look at the numbers: 45 cars sold (50.56%) and with just 2 of the 10 most expensive lots sold and overall takings of just $2,840,700 (41.40% of the total value on sale) they were light years away from the $16.1 million from the previous “Driving into the Summer”. What can we say? We’ve probably said more than enough but this experience goes to show that real or virtual auctions require a method that RM understands perfectly well but this time was absent.
Does that mean there were no deals to be made? Oh yes, of course there were, and they were so good that in order to choose the most interesting ones I had to do “knockouts” between the various lots.
Before talking about the deals, let’s talk about the top lot: the 2005 Ford GT. They produced just over 4,000 but when you look at the market it seems like a lot more. There’s one at every auction, this time it was white with blue stripes with 1929 miles on the clock (another feature: all of them have laughable mileage). It’s the typical example of “if you don’t buy this one, there’ll be another one at the next auction” so even the price was no surprise; at $291,500 it came firmly and squarely in the average.
What were the best deals of the auction?
A 1985 Ferrari Testarossa, one of the rare “monospecchio” (single mirror) versions produced for just two years, usually in far greater demand than the later versions. The example on offer was red with beige interior and had covered 58,600 km (not certified). It should be noted that the odometer was in kilometres because the Ferrari was sold new to Amman in Jordan before being imported to the United States in 1988. Fresh from a major service (including the repair of the very fragile pop-up headlights) it was estimated, in my opinion at a very pessimistic $95-120,000. The sale price was even lower at $84,000. Some time ago I indicated 5 Ferraris under 100,000 euros, if I were to rewrite that list today I would certainly include it. A bargain.
Second case: on a tight budget I would have chosen the 2007 Ford Shelby Terlingua Mustang. Presented at SEMA (the most famous overseas tuning salon) in 2006, the Terlingua pack was a set of accessories that included a different coloration (orange with matte black bonnet), side pipes, 20-inch wheels, and above all a Paxton compressor that raised the power output to 375 hp. This 13,061-mile example was equipped with an automatic gearbox. The modifications package alone cost $23,995 at the time, and at RM the whole car was sold for $17,600. It’s almost like saying: “buy the accessories, we’ll give you the car”!
For the third case it was a tightrope walk between the 1969 Jaguar E-Type S2 4.2 Roadster and the 1963 Austin-Healey 3000 MkII BJ7. In the end, this latter won but only because, despite being estimated at the same price ($40-50,000), the Jaguar was sold for $35,200, while the 3000 went for slightly less, exchanging hands for $29,700. Austin-Healey has never been able to truly capitalize on the rise in the market over the last 15 years: in 2005 it was listed for about $30,000 and it’s still there. Yet the car is a valid purchase: a 150 hp, six-cylinder 3-litre engine that powered many sports cars (and non-sports) of the time, from the MGC to the Triumph TR6. If this model struggles to go up in price you, might as well forget its revaluation and put it in the garage ready for a road trip with friends. Perfect.
The next RM sale will be held in ten days’ time (14th-15th August) and promises to be an unforgettable sale: the equivalent of Monterey but with keyboards and mouse. I note that their commitment is remarkable, and I very much hope it is an unparalleled success. It will be an important piece of an interesting puzzle to evaluate online auctions overall (but we will also have to try to understand if and how much the virus will leave its mark)
CLASSIC CAR MATCHER