Classic car auctions hit a major roadblock in pandemic
Big events in California are canceled, and local economies navigate fallout
After collapsing last year, auctions for collector vehicles started 2020 on a roll, ringing up more than $300 million in sales at events in January in Scottsdale, Ariz., and in March on Amelia Island in Florida.
Indeed, last month the collector car website BringaTrailer.com recorded more than $26 million in sales, up by some 64 percent over 2019. Forty cars went for more than six figures, including a customized Jaguar roadster originally owned by actor Clark Gable that sold for $276,000. Gable bought the car in 1952 for a sticker price that just topped $4,000.
Little more than a month after the Amelia Island auction, however, and with the novel coronavirus bringing vast sectors of the economy to a standstill, organizers of the Pebble Beach Concours d’Elegance in Carmel, Calif., announced they were canceling the event for only the second time in its 70-year history. (The first cancellation, in 1960, was because of inclement weather.)
“It has become increasingly unclear whether or not gatherings of our size will be allowed in August,” said Sandra Button, chairwoman of the Concours — frequently called the world’s premier classic car show. Many entrants, Button noted, had spent years preparing their cars and were already making shipping arrangements. “In fairness to all, and with an eye to the safety of our participants, spectators and volunteers,” she said, “we had to make the sad decision to postpone.”
The decision was a blow to Monterey Peninsula communities like Carmel, Pacific Grove, Monterey and Seaside. In short order, more than 20 “Car Week” events were called off, including five of six major auctions; separate large-scale shows for Italian and German vehicles; and other auto-oriented gatherings and events. Most pledged to reschedule next year.
Since 2010, Car Week sales have racked up over $3 billion in combined revenue, making those classic car auctions the most lucrative in North America, according to collectible car insurer Hagerty. Last year, for example, the auction house Gooding & Co. alone saw the hammer fall on $76,824,740 worth of sales at Pebble Beach.
As the week’s tentpole event, the Pebble Beach Concours routinely attracts up to 20,000 spectators who pay from $400 to $3,500 for entry. Overall, more than 80,000 visitors typically crowd the peninsula, paying sky-high hotel and motel rates; jamming shops and art galleries; and forming long lines at restaurants. According to the Monterey County Convention and Visitors Bureau, a 2014 study estimated that Car Week — which typically stretches over 10 days — generated some $55 million in economic activity and nearly $5 million in taxes. The Pebble Beach show alone contributes more than $2 million annually to charity.
Even in affluent Carmel, with its pristine white sand beaches and verdant pine forests, the absence of those income streams would be painfully felt. “It’s devastating,” said Chip Rerig, city administrator of Carmel, a community of 3,800 people. “Fifty percent of our revenue has been stripped away by COVID-19.”
Rerig said the cancellation of Car Week would cost “a minimum” of hundreds of permanent and seasonal jobs in the area, and the city budget was likely to go deep in the red.
Against this backdrop is a collector car market that has already been making inroads on the web. The pandemic will only push more of the action online.
“Really special cars sell well, no matter where or when they are being sold,” said McKeel Hagerty, chairman of Hagerty, a firm based in Traverse City, Mich., that insures collector vehicles and tracks their values. “The classic car world is and will remain resilient.
We’re not seeing people panic.”
Hagerty drew confidence from his firm’s experience during the 2008-09 recession when vintage automobile prices briefly declined only to rise to new highs after 2010. “We learned from that crisis,” he said. “People now know it’s in their interest to hold on until we’re on the other side of this.”