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Sales of new cars are a good bellwether for how the economy is affecting the average consumer -- and
the indication is that a significant number of people are too concerned about their financial situation to buy a new
vehicle this year.
In addition, sales of collector and exotic cars may be an equally good sign of how the well-heeled
among us are doing.
Last month's sixth annual Barrett-Jackson
Collector Car Event in West Palm Beach, Fla., showed
there's still plenty of money being tossed about
by people who want to buy cars they coveted as
kids.
The auction sold 509 vehicles for
a total of about $23.3 million, according to Barrett-Jackson,
an Arizona-based auction house.
"Even with questions about the economy,
we built an impressive docket of collector vehicles
that brought solid prices across the board," says
Steve Davis, president of Barrett-Jackson.
Still, there were signs that this market may be cooling just a bit.
Z28 Camaros and other muscle cars
from the late 1960s brought strong money, but
prices seemed lower than what was bid for similar
cars at Barrett-Jackson's January auction in Scottsdale,
Ariz.
"I think things are slowing down
generally," says Stefan Lombard, managing editor
of Sports Car Market, a monthly magazine that
tracks collector car auctions.
"People who were a little more freewheeling with their money now are being more cautious. They know that
right now they can't make back the money instantly" by reselling the cars, he says.
Lombard says that what he calls "blue chip" collectibles -- mostly old, rare European cars that routinely
sell for $1 million or more -- are still climbing in value.
"But muscle cars have cooled considerably," Lombard says.
That segment of buyers was largely "new money in the hands of very successful people in blue-collar industry
-- part of the housing industry."
So as the housing crisis deepens, there may be fewer bidders willing to spend huge sums on some collector cars.
What if you bought a collector car a few years ago and now are looking to sell?
"Sellers need to be prepared to lower their expectations. Sellers are coming to the market now with unrealistic
reserves (a set price that bidding must reach before the car is sold)," Lombard says. "It is a buyer's market. Buyers are being smarter with their money."
Is now a good time to jump into the collector car market?
Perhaps, but only if the buyer has done the homework necessary to ensure that he or she is buying a top-quality
vehicle that will hold much of its value even during economic downturns.
Lombard recommends looking for cars that have a lot of documentation from when they were new, cars that
have no questions about their originality and equipment.
"If an amateur collector is intelligent about the car, and is only willing to spend what he or she is comfortable
with, then now could be a good time to buy a collector car," Lombard says.
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