Rotary values going throgh the roof

[jinx]

Bear with me - I had the time to write it and if I really did like the sound of my own voice as much as it appears at first glance - I would post more often and be less concerned about the content. 

As Oscar Wilde never said - because he was not interested in such things -  In a world where we are constantly encouraged to know the price of everything and ignore its value, there are so many people now involved in the trade in classic cars, the business is as hungry as the market - if not more so.  Having based their futures on and loudly trumpeted the message that, 'old cars will make you rich’, the trade is running out of easy prospects. They have pushed the value of collectible Aston Martins towards and past the three hundred thousand mark and a restored E-type Jaguar is now 100-200, which is a lot of money for a mass-produced car that was not the same length both sides when it was new! 

Revisionist historians, either in or feeding from the classic car trade, regularly rediscover much maligned or overlooked nascent classics sinfully overdue enlightened reappraisal.  Consider the urgent, near blanket, coverage given the XJ-S last year in assorted magazines.  Why? Because when you've priced mid-market punters out of their dream E-Type purchase you desperately need to offer them something else to buy.  (And if you cannot you will not be placing any advertisements in magazines.)  Prices are still climbing now given the unrelenting pressure from the trade which ignores all reports of apparently inoffensive rust bubbles at the bottom of the windscreen that indicate the shell may be well beyond economic repair.  Ignorance is bliss - especially while the buyers are even more desperate to have an old car make them rich than the person selling it to them is.  It works while we all keep believing it or until some bloke with an angle grinder starts nervously sucking air through his teeth. 

With customers motivated to stand out in a crowd, even traders have discovered there is only so far the price of an MGB can be shoved upwards in any given year. (Check out how hard they try - A good chrome bumper B is getting very pricy, no better or worse than it ever was yet not by any measure even approaching ‘rare’ status.)  So, their market is hungry for novelty and they need new prospects as well as to drive up values to increase margins.  Fortunately for them, in this case that is as simple as buying cheap then bumping the sticker price on any early rotary you find, in the sure and certain knowledge the competition will follow your lead and do the same.  They have been doing it for the last couple of years and it has worked because, like any free and self-regulating market where price fixing is in the common interest of those operating it and demand - especially uninformed demand - outstrips supply, it always will. :-)

Hand built cars like Astons and Italian exotica command prices based on their rarity, period history, restoration or patina and artisan credentials. The mass-market classics have their prices based on nothing more than those charged for their bespoke cousins and what the (increasingly desperate) market will bear.  So, uplifting the price of the E-Type inevitably dragged Austin Healey prices up in their wake because they, like everything else, have a fixed equivalency relationship in the market   These hikes were made an acceptable if horribly bitter pill for the mid-market buyer to swallow because for several marques you can buy every panel, nut, bolt and washer used to build the car originally (or one quite like it) thereby protecting the integrity of the increased expenditure.  This does not apply to any rotary nor any of the more collectible Japanese cars that I know of.  

For all I do know, the buyer of this RX3 has a mountain of spare parts, replacement panels and interior trim as well as unparalleled expertise and resources so will meet these thoughts with scorn.  I wish he/she well, glad they are not the sort of classic owning optimist who thinks rust can be cured by a respray. This car was built in an age when the threat of corrosion was largely ignored. (I’m not sure the makers of the XJS have the same excuse!)  I’m not suggesting the RX-3 shown cannot be readily salvaged, it looks a great place to start but it wont be a case of dashing an e-mail off to buy replacement panels or a complete shell - which is why bringing it back will be more difficult (and expensive.)  Maybe if Australia had crappier weather there would be a supply of pattern body parts that would make restoring even an FC economic.  

Wait! Surely that leaves a despondent FC owner no happier than when we began. Unless… 
Back when the old car boom was just taking off in the UK, the manager of an internationally renowned Jaguar restorer, an engineer not a customer relations specialist, suggested his clients’ logic was ineffably flawed.  “They pay twenty-grand for the car then bring it to us.  We charge them twenty-grand to restore it and give them back a twenty-grand car. They're stupid.” 

This would not happen today. They would get back a thirty-grand car because so many people have a vested interest in restoration work adding value, to be able to make money selling it on or, in the owner’s case, not to lose as much. Restoration costs for mass market cars are difficult to recoup unless you radically underpaid for it in the first place.  This has become increasingly unlikely now because today…everybody knows old cars make you rich.  Back when the comment was made an XK120 Jaguar was worth much more than the later 140 or 150 models - then sometimes still used as parts donors for the earlier cars. (Sounding familiar FC owners?)  Today XK prices are far more even and all in or near the six-figure zone.  Back then, the newer Mark 10 and 420 Jaguar saloons were regularly raided for spare parts to keep XK’s running. The unloved, bent or rotten hulks in breaker’s yards gave up their engines, gearboxes and switchgear to their more charismatic ancestors and their back axles to hot rods.  “Repair too difficult and expensive? Easy! Just replace those tricky parts with those from a donor car.”  Historically that is the value position of old cars before they were rediscovered and labelled as ’investment opportunities’ not junk.  So, take heart you FC owners. Check the price and loudly trumpeted desirability of any surviving Mark 10 or 420 Jaguar saloon…but please spare a thought for their many brethren sacrificed to keep older XK’s running. These days, of commercial necessity, these cars will have disappeared without trace to perpetuate the trade’s high value assertion that a £270,000 XK120 has the same engine and gearbox it left the factory with! (...Survey says...)

After I wrote that it occurred to me that so desperate has the pool of potential buyers become, dealers probably do not need to worry so much about cars having ‘wrong’ engines being worth dramatically less than their genuinely original peers because the tide of hyperbole about anything over five years old has comprehensively muddied the water - or is that blood?   While savings attract interest rates that make it pointless to leave the money in the bank and that nice man down the road who sells old cars is promising stellar returns on every purchase, no matter what condition,  surely a prudent investor would be mad not to dive right in and maximise the return, which can be loosely translated as: “Buy now while stocks last…until we think of something else we can stock once you can’t afford these!”

The slogan 'reassuringly expensive' means very little in the energetic old car market - with its carefully cultivated crops nurtured by those that haunt its barns and then, having harvested the season's offering, sew the seeds of desire for another by spreading fertiliser across endless column inches. With so many busy fingers digging in the soil, high costs mean little more than higher ones tomorrow.  I hope for all your sakes and the memory of rotaries past that the XK exemplar holds true for Hiroshima's finest.  Has a Cosmo not already sold for £100,000? Your time may yet be coming!   That’s enough nostalgia for now - it’s not what it was, which is something Oscar Wilde never even came close to saying.

[clive]

Not only old cars can be price hiked, new cars can as well,

From memory in the early seventy's farmers had 1st pick of the new Range Rover and because of the waiting list were reportedly selling for something like a grand over list which people were readily paying just to get one, on the quick plus I have heard of this with new Super cars in recent years as well.

In more recent times one of the "rich" guys who has an office with us, deliberately  paid well over the £110 K to jump the queue !, this really shows that old or new, that if people have the money they will pay to get what they want!.

[Essex2Visuvesi]

The "new" mini did the same thing, people had them for a year and the sold for the same price as a new one if not more.

[johnf]

Buy a Lambretta and restore it - but it must be Italian.

Sorry for that but Clive will understand

[jinx]

Yes but surely the essential difference with new car premiums is the source of the pressure and the viability of the idea long term. Dealers can grab a premium for early adopters - people who must have the latest and will pay over list to get it - but the phenomenon is consumer driven and lasts only while the novelty does - then its back to standard pricing.

I think the difference is that classic values have been permanently pushed upwards to serve the interests of the people who trade in them not at the behest of customers clamouring to pay more!  It began quite naturally with the best cars increasing in value because of their rarity or pedigree, then - when the market did not flinch - the same inflationary policy got applied to everything and the cascade began.  A Healey is now 70k because an E type is 100. That means a dealer can ask 25K for a very ordinary MGB because thats how the values relate to one another on the market scale. I will not mention the clearly co-ordinated upward price pressure applied to my Italian car of choice because I'd only add to the misery that has seen the 'entry level' price jump by 80-100% in two years.  There are no fewer of them now than there were then so rarity is not the issue and like the RX3 Clive posted - a bad one will swallow money like a wooden boat does. LOL

There are plenty of cars with as many rust issues as the FC but at the moment they are the rotary equivalent of the Mk10 Jaguar - pilfered for parts or doomed to destruction.  Had they been made in Abingdon there would be a swathe of people flogging repair panels but they would also have a firm place in the market hierarchy. The trade will get round to them eventually, a handful of glowing classic reappraisals will appear in the classic media and prices as well as interest will start to climb.

It is what it is...I just think it is important to know when you are being managed and cynics please note:  I did not say manipulated. (Although I could have  )

John - Do you think the disparity between Vespa and Lambretta prices reflects their relative value as machines or market making by the trade?  As I remember the sixties both had their proponents and numbers were fairly equal...?

[Essex2Visuvesi]

Lambretta all the way
I have most of an Italian 1961 Li150 in the shed back in Finland

[clive]

Buy a Lambretta and restore it - but it must be Italian.

Till the other day I thought all those hair dryerery things, whoops, Lambretta's were all Italian ( Real sorry, only joking, slapped wrist,  that was the old biker from when I was a kid coming out  )

As I said to John, I did actually own a Vespa till I tried to corner it like a motor bike, grounded the fairing and fell off the damn thing and then got rid of it   

Anyway, back to values, I've gotta say, unlike the 80's when Classic car prices went through the roof due to people "investing" then it all crashed, this time round I personally feel its being driven by real enthusiasts so the prices will be here to stay 

[johnf]

"John - Do you think the disparity between Vespa and Lambretta prices reflects their relative value as machines or market making by the trade?  As I remember the sixties both had their proponents and numbers were fairly equal...?"

I must admit to being biased and probably unable to give a balanced view. I think in the sixties there were two specific groups favouring either Lambretta or Vespa. I think there was a geographical split as well with more Vespas in the south. I have always considered the Lambretta a icon of design, similar to the 3rd gen, with timeless appeal. I have no idea of the relative values between Vespa and Lambretta as I wouldn't take a Vespa as a gift. It's a bit like MG owners in the 60's wouldn't give a Spitfire a second glance. I don't think prices are driven by market forces, just that specific items, be it bike or car just tick all the boxes.

As you probably gathered I've taken on a 1963 Lambretta project/hobby that will undoubtedly give me a lot of fun and when completed generate a lot more income than cash in the bank if I chose to sell.

I've joined a local scooter club that meet at a pub every Thursday and this is great as it feels similar the going to the regular MRC meets on the mid 2000's - Which I will always remember as being a bit special.

Enough of the thread highjack - no more scooter talk - promise.

[jinx]

Interesting take Clive - I think the absolute opposite - that the upward price movement is being managed by the retailers en-bloc as their reaction to a market where the 'enthusiast' you see as beneficiary is just someone desperate not to miss out on what has been presented as a sure thing, at seemingly any price.  This is possibly in part because he/she has sod all hope of ever affording a house these days, which was traditionally the way most people have made themselves richer here.  I'm not sure it is a sustainable model for the market or the hobby any more than it was/is for property.

The endlessly upward price curve that ignores value except in relative terms (ie Ferraris always did cost more than Mazdas) must surely collapse at some point because our capacity to borrow enough to join the club will eventually come to an end.

The RX3 will after restoration costs and incidentals then be a 60K car which given its rarity and race pedigree it could realise without showing much of a profit - so it would go for more because profit is a prerequisite?  I think I saw and RX3 sell for 78K the other day.  Nice as it might be (I'd like one! LOL) I do question whether it is worth 78K of anybody's money just as I think 200K for an E-Type is absurd - especially as there are more of them left than RX3's!  Once the price tags go too high, things stop being what they were - cars or painting or sculpture - and exist only as assets. 

[boosted]

there are some crazy priced FD's on ebay atmo....they dont seem to hang around either which suggests there selling....not that it really concerns what is it worth, how much spent etc but when you tracking a fast appreciating car does make the brain tick, Mine was always worth more in parts so not a risk tracking but now i think thats neutral....still better than pissing it up against the wall 

[boosted]

A white fc turbo 2 on ebay....project been off road for a while....at a grand already...will be interesting to see what it makes....

Sent from my SM-N910F using Tapatalk

[Essex2Visuvesi]

Saw that one last night
Bloody typical shows up after I've bought the EGI 

[boosted]

I did an mot history check onit...off road since 2009....and had/ needs extensive welding....such a useful tool.....an automotive crystal ball.


Sent from my SM-N910F using Tapatalk

[boosted]

edit*** mot history online from 2009 to 2013...when not presented for another mot..so no fail online...so been off road since 2013 ish...had welding and passed....worth alook for someone 1.