The Classic Car Market

By

Paul A. Eisenstein

 

HEMISPHERES

United Airlines,

February 1994

 

 

Don’t call Don William’s a used car salesman.  As far as he’s concerned, he’s selling history. But at the prices he’s charging, it might be better to think of Williams; lavish San Francisco-area showroom as the automotive equivalent of the Mercantile Exchange.

 

Nestled just east of San Francisco, the hillside town of Danville is nearly out of sight, but certainly not out of mind – at least for car collectors from Washington to Rome, Abu Dhabi to Tokyo. And for good reason. On any given day, visitors will find several million dollars worth of classic automobiles on display at Williams’ Blackhawk Collection. The mirrored ceilings and granite floors polished to a reflective sheen provide a unique view of rare boat-tail Bentleys, vintage Bugattis, one-of-a-kind Ferraris. They may be treated like fine works of art, but this is the true definition of a road show.  Come back a week later, and a completely different mix of cars will have rolled onto the floor of the Blackhawk collection.  “My desire isn’t to have possession,” says the dapper 48-year-old Williams. “I just want to touch them all once. Twenty years from now, I want to be able to look at pictures of the world’s most desirable classic cars and know that I was involved with them all.”

 

Either at auction or through the Danville store. Williams claims to move $150 million in metal each year. Few customers actually set foot on the showroom floor, though. The deals are done mostly by phnone, fax, or courier pouch. Williams boasts of being the first American dealer to break the million dollar barrier and hints of a role of a role in some of the most expensive car deals in history. A Japanese businessman reportedly paid $15 million for a unique Bugatti Royale. It shouldn’t be surprising, then, that The Robb Report, a magazine for the actively affluent, named Williams one of the leading “power players” in the classic car market worldwide.

 

In the waning days of the ‘80’s, that market became glutted with speculators, some of whom barely knew how to drive. It didn’t matter to them whether they were dealing stocks, bonds, or real estate, or classic coupes. They knew that the price of a mint-condition Ferrari was doubling every year. Even run-of-the-mill models – Williams called the “hyperboil cars” – drew six- and seven-figure bids. But the recession hit harder than a speeding ticket. Those same cars lost 50 percent, 60 percent, sometimes 75 percent of their value, virtually overnight.

 

While some collectors were wiped out by the market’s collapse, others were, frankly, relieved. The speculators went looking for greener pastures, leaving the classic car market to people with a deep and abiding love of automobiles.

 

It still doesn’t hurt to have deep pockets, but that’s not a must for buying your first antique automobile. Even at the Blackhawk, the average car goes for a relatively affordable $40,000. For every $500,000 Ferrari, there are a dozen American Classics, Jaguars, or Alfa Romeos to choose from.

 

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Car collecting is a passion spreading ‘round the world. At a one day Tokyo auction in 1991, Williams sold $28 million worth of classic cars. Even with the Japanese economy deeply mired in recession, auctioneers are still gaveling in millions in sales.

 

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Every year, hundreds of like-minded collectors fill the Italian countryside for the legendary Mille Miglia. As the name implies, it’s a 1000 mile tour of some of Europe’s most beautiful valleys and plains.

 

 

Three years ago, the Mille came to America. The California Mille echoes the character of the real thing. Not just in the cars used and the roads driven, but also in the food and wine consumed along the way. “This is supposed to be a friendly gathering of enthusiasts,” proclaims founder Martin Swig. “We do have an entry procedure, with a fee of $3000 fee per car, because I only want the right cars, and don’t want the kind of people that will raise hell.”

 

“It’s a cruel reality that these cars are so valuable. They should be judged on their ability to work as an automobile,” says Patrick Ottis, one of the 50 drivers attending this year’s California Mille. From his walnut-paneled office at Blackhawk, Williams doesn’t entirely disagree, although he has done his best to keep prices rising. He insists that “the great artists of the world during this century worked in the automobile business. I give a car a test. If it is beautiful from every single angle, I get chills when I find it.”

 

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