by Mike –
Owners of a collector car valued in the $1 million to $5 million USD probably own many cars although maybe only one at $5 million and the individual values may vary quite a bit and go below $1 million for a single car, or many cars. It is also likely that the total value of the collection represents a reasonable portion of the collectors net worth.
These collectors likely are concerned about the market ups and downs, weather it is the stock market or the collector car market, because their personal financial situation is tied to the value of their total car collection.
Mercedes 300SL Roadster
They indeed may be motivated to time the market and attempt to buy low and sell high – trying to figure out which marque and model will be the next one to move up in value and buy one, or more, before they do move up. They may even buy a car they do not particularly like because they believe it to be a good investment.
They do think about the expensive cars as an investment in addition to a lifestyle enhancement. Their ownership time horizons are probably shorter than the collectors discussed in part one and they are also motivated by the social status and the other people they may meet as a result of owning these collector cars.
However, if they miss buying that Mercedes 300SL (Gullwing or Roadster) or Ferrari 365 GTB/4 (Daytona) they can wait because there will be several more for sale in the coming months. They take a risk on the price changes but at least there will be more examples on the market.
Ferrari 365 GTB/4 (Daytona)
The collector who owns cars priced in the range of $100,000 to $1,000,000 USD probably has fewer cars in the collection. The total value of the collection has a chance of being a larger percentage on the collectors net worth than the previous groups discussed.
These collectors are more likely to be concerned about the market conditions because of the possible direct effect on their financial situation – both up and down. They are price sensitive. However, there is a better chance that the cars they own are ones they have a passion for and they did not buy them because they thought they would make a profit.
De Tomaso Mangusta
They want to have a positive ownership experience but they do not want to lose money, or not very much at least. The passion, experience and lifestyle are more important than making money.
Collectors who collect cars priced below $100,000 probably only have a few cars, maybe only one. There are exceptions such as wealthy collectors of American Muscle cars.
Hot Rod
These collectors will spend more money than the car is worth for a restoration or creating a custom car such as a hot rod that may not be worth as much as they have invested. They do this because they have a passion for an individual marque or model. The creation of a custom car or hot rod is an artistic endeavor.
They likely will keep these cars longer and are not as concerned about making a profit. The social aspect is important and the friends and people they meet enhance their ownership experience.
They do not buy and sell as often as the car collectors in the other segments and probably do not follow the ups and downs of the market routinely.
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I hope I did not offend anyone with these sweeping generalizations – no hate mail please but do let us know what you think in the Comments.
MIke, on the knock buddy.
Can’t be absolute with any generalization of course, but you seem to have hit the picture pretty closely for those that I know, which live in the bottm two categories, but happy to take your opinion on the top tier.
Quite an amusing perspective.
As ever, a good read.
Cheers.
Thank you Tony.
I should have mentioned that a person can be in more than one of my categories and the boundaries may vary. I had to select some value numbers as ranges and certainly one size does not fit all.
Beleive you hit this on the mark, mike. For those of us not in the “know” your commments are greatly appreciated! Keep the info coming. love your column! Jeff Roberts Toledo ohio