James B. Stewart gets worried about the classic car market in the New York Times because Bonhams sold a Ferrari 250 for $38m. What’s interesting about Stewart’s take is how it repeatedly uses the art market as a foil to the car market’s advantage and detriment. There is also the knee-jerk tendency to locate the rise in all asset prices in the Federal Reserve policies. the latter is noteworthy here because the car market has been running on a different track from the art market with a pronounced rise later and, now, lasting longer than the rise in art market prices that ran from 2010-2013:
“I’m becoming increasingly uneasy,” Scott Grundfor recently wrote in his newsletter for car collectors. (Mr. Grundfor’s company also restores and consults on classic cars.) “I’ve firmly believed at least 50 percent of the dramatic rise in car values can be attributed to the printing of money and the manipulation of interest rates by central banks.” […]
“I’d like to see a leveling off” of prices, said Keith Martin, a car collector and founder of Sports Car Market magazine. “This can’t go on forever.”
But others dispute the idea that classic cars are in a bubble. Mr. Hagerty, for one, said he saw none of the leverage or uninformed speculative buying that characterized the surge in prices during the late 1980s. Mr. Martin, too, said he saw few signs of excess. “The people who are buying are very discreet,” he said. “You don’t see any of the exuberant buying that you see at the art auctions.” […]
“The $38 million raised eyebrows, but it’s less than a third the price of the most expensive painting,” said Eric Y. Minoff, a car specialist at Bonhams, which also sells fine art. “And cars are also usable objects. A few collectors keep them locked up in climate-controlled garages, but most drive them.”
With $38 Million Ferrari, Classic Car Market Revs Up (NYTimes.com)