My Two Cents Worth

by | March 2017

At Gooding & Company’s Amelia Island auction, this 1998 Typ 911 GT1 drew active bidding from buyers in the room, finally selling for $5,150,000 plus fees. (Photo by Jensen Sutta © 2017 Courtesy of Gooding & Company.)

 

All things Porsche have had an incredible seven-year run-up in prices, with some really great cars finally starting to level out and even drop in price. We’ve seen this in the auctions during the first quarter of 2017. There are many reasons causing this so let’s try to sort this out. 

The first reason cars are hitting the market is obvious: Panic! The sky is falling! 

Twiddle Dee and Twiddle Dumb bought cars they didn’t love strictly for the purpose of making money because they spent too much time listening to all the blog “experts” out there. Oops! Bad idea! 

Second, they bought average cars. 

Every price guide is based on what? Average cars! An average car is up-to-date in service year-after-year, and it has tires less than six years old. In the collector car world in all appearances, a car like this looks exceptionally nice upon inspection. 

A great car is a car that has been shown exceptional care, it has low mileage, and its life is documented. Or it has undergone a professional (not you and Billy Bob) restoration with plenty of documentation both on its history and restoration. A professional restoration is not done at your local service shop, its done by a specialty restoration shop. There is a big, big difference; it’s called details!  

Third, the trolls that inhabit message boards are not experts. They just think and act like them. And way too many buyers are listening to the wrong guys! Brokers have no skin in the game, no money, little time, and usually slim knowledge of the actual market. The first five-digit estimate ($$) from the local service shop usually opens the buyer’s eyes to what they really acquired, but it’s too late. 

Simply stated: Because you worked on these cars or sold these cars, drove these cars, raced these cars, and read every book on these cars 30 years ago does not make you an expert today.

What’s happening in the market today is a separation of the men and the boys. The top tier true collector cars – such as the 1998 911 GT1 shown above – are still gaining in value while 90% cars are dropping. The top tier market has an entry price much higher than ever imagined just a decade ago and it is for only the rarest and most desirable cars. The 918 buyers have taken notice and only want the rarest, best, and lowest mileage cars to invest in. The key word is invest! 

When you buy the best, you notice that the market does not fluctuate much. 

Plenty of collectors want the best, few want the others? Where are you in this equation?

This is just my 2 cents worth.

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