What's going on here?
A '70 LS6 Chevelle with a documented 26 miles on the odometer sells for $354,200 on eBay Motors.
Detroit musclecar collector Al Maynard is offered $1,050,000 for a one-of-a-kind '68 Z/28 Camaro convertible built for Chevy Division president Pete Estes in 1968. Maynard turned the offer down!
We saw this ad stuck to the windshield of a '68 Shelby convertible--it's only $99,995! At 4.9 percent interest on a three-year loan, that's only a touch over $3,000 per month! That's a house payment!
Craig Jackson, owner of the prestigious Barrett-Jackson auction, claims he knows of an offer of $2 million for a '70 Hemi 'Cuda convertible. The E-Body Hemi convertibles were the first musclecars to sell for more than $1 million.
What's really going on here? These are not fictitious examples intended to throw blood in the water to create a musclecar feeding frenzy--the truth is sufficiently chilling. A musclecar price surge has been building for the last two years, but recently it seems to have exploded with stories of outrageous prices paid for both modified and restored '60s and '70s musclecars.
There are literally hundreds of examples of musclecars selling for what would have been ridiculous prices a few years ago, and speculators would have you believe is that there is no end in sight. So why are prices escalating and why now?
Yenko Camaros have always been highly prized and are one of the price leaders for Chevrolet musclecars. This Yenko clone was one of the cars that went across the auction block.
The Power of Perception
It's important to emphasize here that the price for a machine like a fully restored '69 Z/28 or a '69 Ram Air IV GTO Judge is based on something called perceived value. The market, which includes musclecar enthusiasts as well as the general public, has identified an increasing variety of these older cars as having a greater intrinsic value. This is purely a subjective evaluation. Therefore, someone who is not an enthusiast may not see the value as being nearly as great as a die-hard fan who thinks the sun rises and sets around 428 Super Cobra Jet Torinos.
It's essential to understand this phenomenon because these perceived values have a way of changing very quickly. This is also the basis around which the stock market operates. Investors all over America thought Martha Stewart as some sort of deity until she was convicted of insider trading. Then in literally a few weeks' time, her company's stock values plummeted. The business didn't change, but everyone's perception of her business practices changed and the value dropped. Closer to home, this same sudden shift in the musclecar market game occurred in the mid-'80s when values soared and then just as quickly dropped.
Be aware that the whole psychology of the auction atmosphere is intended solely to influence you to purchase a vehicle. Successful auction buyers do not succumb to the overt crowd pressures and ego-stroking that are a part of the selling process.
Older but Not Wiser
We must also look at the age of the people who are driving the value of these machines. The age factor is also critical from the aspect of the people funding this value spike. The people raising the stakes in this automotive poker game are between their late 40s and early 60s who now have a significant amount of disposable income and who may be escaping the decline in the stock market. This is evident in prices paid for both restored musclecars as well as the serious cash people are dropping for modified cars. Basically, this phenomenon is being fuelled by men (and some women) who desire the kinds of cars they either owned or wished they could have owned when they were younger.
This leads us to two major influences in the musclecar value game. The more established of the two are the many prestigious auction houses that cater to the expanding collector car market. The newcomer is eBay Motors. We've devoted an entire separate story to how eBay has influenced the market. The other big influence is the major car auctions.
Is it possible that a third-generation Camaro or Fox-bodied Mustang will be worth serious money in another 10 to 15 years? Perhaps not, but Chuck Hanson thinks that tuner cars like a Roush Mustang (shown) or a Lingenfelter twin-turbo Corvette might.
Auction Action
There are several companies that hold impressive automotive collector car auctions many times a year, including Barrett-Jackson, Kruse International, and Russo and Steele. The one that has garnered the most attention recently is the Scottsdale, Arizona, Barrett-Jackson auction last January where the company sold 744 cars for a total of $38.5 million dollars, as well as leveraging 15 hours of live airtime on the Speed Channel. The list of high-dollar sales is staggering, with one of the big sellers an impressive red and white '55 Chevy with a custom tube chassis, C5 Corvette suspension, 550hp 502 Rat motor, and a six-speed that went for an incredible $226,000! Resto musclecars were also hot, with a '70 Boss 429 Mustang attracting $126,900.
One key to understanding what's happening here can be found in a quote from Hagerty Insurance's spring '04 newsletter. In referencing a '70 Hemi 'Cuda that sold for an astonishing $216,000, Hagerty's newsletter quoted Keith Martin of Sports Car Market magazine: "Part of the high value can be explained by continued musclecar madness, but even more of it came because the car was sold during the section of the auction that was televised live by Speed Channel. It seemed like every time the TV lights went on, the prices soared, as guys with dough wanted their buddies back home to see them on TV, spending big bucks to get their dream car."
The Clone Question
When the musclecar restoration movement really took off about 25 years ago, the concept of a clone car was instantly met with a huge cry of derision from what you could call the musclecar conservative (or hard-core) right wing. Clone cars were considered the ultimate offense, mainly based on the assumption that they were intended to deceive the potential buyer into believing the car was genuine.
This latest musclecar resurgence has created enough demand in all forms of musclecars that "clone" is no longer a dirty word. Much of this new liberal acceptance is fueled by the desire to own a car even if it's not "real." Musclecar true-believers have always considered clone cars to be nothing short of immoral because even if the original builder is up front that the car is a clone, all it takes is one dishonest subsequent owner to create a false paper trail to represent the car as factory-original.
The result of this deception is always the same when an unsuspecting owner discovers that the car is a fake and the value of his investment tumbles radically. The bottom line is that the burden of ensuring that any car purchased is in fact genuine falls back on the purchaser, which is how it has always been.
ACES president Chuck Hanson gave us a great example of how much clones are increasing in value. Hanson has owned a documented 350hp '69 SS 396 Chevelle convertible for some time. After collecting all the appropriate parts, he decided to convert the Chevelle into a "clone" L89 aluminum head 375hp/396ci version that would be original right down to the correct casting numbers on the heads, a smog pump, the proper carburetor, and all the other related engine components. The word got out that he was building this car, and Hanson says he has been offered $55,000 from a collector who is fully aware that the car is a clone.