Classics Vs. Muscle Cars

Patrick C. Paternie

08/01/2005

The decorous halls of old-car hobbydom are trembling to the thumping idle of a Hemi-­powered muscle car revolution. Perhaps the loudest rumble came when a 1971 Plymouth Hemi ’Cuda ­convertible changed hands for over $3 million. That was one of only seven such cars in the country, but other rare Hemi-powered models routinely fetch over a quarter million dollars. Clones of these cars, or what some auction- eers euphemistically refer to as “re-creations”–powered by a nonoriginal Hemi “crate” engine–can command more than $120,000.

What is causing these cars to scorch off the auction block faster than they did off the starting line during their drag racing heydays? A 1970 orange ’Cuda convertible used on the Nash Bridges TV show instigated the fracas when it sold for $148,500 at the 2003 Barrett-Jackson auction. Many experts, however, credit another television production–Speed Channel’s coverage of the Barrett-Jackson auction–for the stratospheric prices and attendant frenzied activity in the muscle car market.

All this activity is eerily reminiscent of the rampant speculation in Ferraris back in the late 1980s, when public interest was piqued by a Ferrari convertible–driven, coincidentally, by another fictional television police detective by the name of Sonny Crockett, who was also played by Don Johnson. At the height (or depths, depending on your point of view) of the Ferrari frenzy, even the coupe versions of the (albeit fake) Daytona Spider featured on the show were fetching more than a million dollars. That bubble burst in 1990, and today, as Russo and Steele auction principal Drew Alcazar advises, “Those of us who survived can buy any Daytona we want for $150,000.”

Are today’s muscle car buyers teetering on a similar bubble? Will values fade as quickly as one of Sonny Crockett’s pastel-colored T-shirts? Or is this market a true reflection of the changing tastes of cash-laden baby boomers who grew up with muscle cars as their dream machines, instead of depression-era classics such as the Duesenbergs and Packards that were the foundation of the car-collecting hobby in this country?

We polled a cross section of wise old car experts to see if we could make sense of this phenomenon. Their opinions are as varied and all-encompassing as Chevrolet’s engine option list was in the late 1960s.

Jim Wangers may not have invented the muscle car–his boss John Z. DeLorean and a few Pontiac engineers deserve credit for that–but his creative marketing campaigns for the GTO touched off the horsepower race that started in the streets sometime in the ’60s and has since moved into the collector car auction houses.

“You’ll notice I’m laughing before you finish the question,” Wangers says when asked his opinion about the current state of affairs. “There’s nothing different about the cars in terms of sophistication, or lack thereof, from 10 or 15 years ago that would affect their value–except [that] some very smart promoters, along with some smart television producers, have put together a good show. They’ve created a market around showmanship.”

Wangers understands showmanship. He once duped a major car magazine into racing a Pontiac GTO, in which he had clandestinely installed a larger-than-stock engine, against a Ferrari GTO. When the cover story blared the news of the plebeian Pontiac’s easy victory over the high-speed icon, the muscle car era was off and running along with Pontiac sales.“I think what has been put on TV, in an exciting and professional way, has overinflated the value of these cars,” says Wangers. “It shows what kind of a world our marketplace has become, or I guess I could put it what kind of a marketplace our world has become. But it’s a good stimulus for the hobby.”

What Wangers has a hard time reconciling is that today’s high prices are based on rarity rather than an automobile’s intrinsic value in terms of performance, design, or build quality. The Hemi-powered street cars are rare because no one bought them. “It’s a wonderful racing engine, but it stinks for the street,” says the former drag racer. “It was a constant pain in the ass, and they ultimately had to drop it.”

He cites another example closer to home for him. “In 1971 the GTO Judge had run its course. It was a good promotion in 1969, but by then it was tired. The market ignored it,” he says. “Talk about a cold hunk of iron in the market. Only 17 Judge convertibles were built, and they had a hard time selling that many. But if you happen to have one today, your working days are over.”

Julius Steuer sees things a little differently. As one of the world’s most respected Mopar restorers, Steuer did mechanical work on the cars used in Nash Bridges. He thinks prices for the rare Chrysler muscle cars are high because of market manipulation by a collector who wants to drive up the value of his investments. Steuer won’t name the individual, but says he is not a speculator. “He does it for the love of the cars,” he says. He drives his $2 million to $3 million convertible from L.A. to Phoenix.”

Regardless of who or what is driving the market, Steuer declares, “I think Hemi convertibles are as high as they’re going to go, but everything rare under them is still moving up.”

A Plymouth fanatic since he was a kid, (“I didn’t even have Dodges for a long time. Why? Ask my analyst.”), Steuer says the reasons rare Mopar cars command high prices are twofold: Not only are they the best documented, they also boast the lowest production totals. It’s a simple case of supply and demand.

Hyman Ltd. Classic Cars showcases a variety of rolling stock, with an emphasis on classic American icons and postwar European sports cars.

 “There are more ’69 Z28 Camaros or 427 Corvettes today than originally rolled off the assembly line,” he says, referring to how easy it is to “manufacture” a classic muscle car from today’s off-the-shelf parts. Steuer himself has no problem building ’Cuda clones for Nash Bridges. “It’s the same fun, look, and drivability,” he says when comparing them to the multimillion-dollar originals. “But they are not good long-term investments. I suggest you buy an original car for investment.”When asked whether assembly line—built Detroit iron can ever become a classic worth more than, say, a handcrafted Duesenberg, Steuer says: “I never liked Duesenbergs. I graduated high school in 1969, and all I ever wanted was a Road Runner.”

Although he is in the same age bracket, Mark Hyman has a completely different view of the Duesenberg-versus-muscle-car debate. That is no surprise, since the classic car dealer from St. Louis is known for his outspoken and contrarian views of the hobby.

“I don’t buy and sell muscle cars,” Hyman says. “I don’t like ’em.”

His father, who ran a tire shop, owned an Auburn and a Packard. “I was a weird child. When I was 16, I was into classic cars,” he says. “I understood the difference in build quality. Muscle cars were fast, but their build quality was horrible.”

Today his preferences still run toward pre- and postwar American cars, along with custom-built French cars and European sports cars such as Jaguars, Ferraris, Maseratis, and Lamborghinis. “These cars are far more about craftsmanship, design, and culture, than motors and transmissions,” he explains. “You can’t make one in your garage.”

Hyman sums up his take on muscle car values in one word: “Insanity.” “I think it has been very creatively and ingeniously planned out,” he says. “What you see there (at Barrett-Jackson) is a phenomenon, but it wasn’t by accident. It’s cool, it’s fun, but you have people buying cars who don’t know what they’re buying, why they’re buying, or why they’re paying what they’re paying. Once the correction occurs–and it will–they’re gone. And that’s not good for the hobby.”

Hyman has no problem with people spending money to own cars they love if they take the time to educate themselves about the cars and the market. “What scares me is they don’t have a clue,” he says of buyers who get into bidding wars just because the cars are on television. He draws a parallel to all the people who suddenly became stock market investors during the dot-com hysteria.

“It’s a fad, a blip,” he cautions. “If everybody doing it was a car guy and really into it, I’d say the market was really good for that stuff. Lots of people with lots of money who are uneducated in cars are being spoon-fed muscle cars.” Hyman feels a market correction is coming, but says it is still too soon to predict when.Nick Soprano deals in restoring and maintaining classic and competition sports cars. Like Hyman, he does not deal in muscle cars, but he offers a different opinion about why people buy them.

“In general, the muscle car buyer grew up in a V-8 neighborhood,” he states. “He’s not savvy to Mercedes-Benz SLs or Ferraris. He’s looking for a car that generated desirabil­ity to him when he was growing up. It’s a nostalgia-driven purchase, a reminder of drive-in movies, the Beach Boys, and going to the malt shop. The Ferrari buyer is also nostalgia driven, but he also has a desire to experience the racing history and the V-12 pedigree.”

Alcazar of Russo and Steele believes that the majority of the country has been exposed to muscle cars more than exotic sports cars. That is why he says: “The market today is geeked up on muscle cars. Every evolution of car collecting is a reflection of the collectors’ youth.”

Bidding heats up as a 1963 Shelby Cobra factory racer tops the $2 million mark at Russo and Steele’s 2005 Monterey, Calif. auction. (Click image to enlarge)

For that reason he believes that well-documented examples of desirable muscle cars, such as the 1971 Hemi ’Cuda convertible, are genuine collectible cars. “It’s already established as the Duesenberg of the future,” he says, “because people are ready, willing, and able to pay that kind of money, so that’s what it’s worth.” He cautions that rarity alone does not always equal desirability and that a “rising tide does not raise all ships.” Alcazar also believes that as today’s muscle car collectors become savvy and evolve as collectors, they will graduate to appreciate European sports cars.

The experts do agree on certain things: One is that the car collecting market always attracts a lot of money and investors during periods when traditional investment options such as stocks, interest-bearing instruments, and real estate offer low returns or questionable value. They also agree that a market correction is coming that will adversely affect the value of cars that lack or have poorly documented histories. The same applies to clones, re-­creations, and reproductions. Alcazar cites as an example the Shelby G.T. 500E convertible that fetched $550,800 last April despite being a “1968” model built in 2004.

Gone in a puff of smoke: A rare Ferrari leaves the premises of Motor Classic and Competition, specialists in European exotics. (Click image to enlarge)

All agree that educating oneself is also a key to enjoying the car-collecting hobby. Both Alcazar and Hyman adamantly stress the buyer’s responsibility to know and understand what he or she is bidding on or buying. Due diligence is crucial, especially in a market that is constantly changing and one in which even the experts are astounded at some of the selling prices. Part of the problem is that in a “no reserve” auction many sellers are forced to clandestinely buy back their own cars to avoid a potential loss.

“I used to be able to predict within $500 of what a car would bring,” Alcazar says. “That’s very hard to do today. Now it’s like that old hockey saying: Skate with your eyes up.”

Experts agree that, first and foremost, collectors should buy what they like; cars should be purchased for enjoyment, not for speculative or even investment purposes. Despite the large amount of money that can change hands, car collecting is still a hobby. As Nick Soprano advises: “Trust your heart. Buy it because you love it. A car’s value is ultimately what it means to you.”

CONTACT LIST: 
Hyman Ltd. Classic Cars, 314.524.6000, www.hymanltd.com
Motor Classic and Competition Corp, 914.997.9133, www.motorclassiccorp.com
Restorations by Julius, 818.882.2825, www.rbyj.com
Russo and Steele Collector Automobiles, 602.252.2697, www.russoandsteele.com