Driven to distraction – sold for millions

Listen to this article

00:00
00:00

The 800-strong crowd that gathered for the Christie’s California car auction at the Monterey Jet Center in August were pretty much there for one thing. The top lot was a Ferrari 250GT Lusso Berlinetta that used to belong to the late actor Steve McQueen, who had ordered it new in 1963, built to his specifications.

This was McQueen’s first Ferrari and, according to friends, such as the photo­grapher William Claxton, was a car that he loved. He and his wife Neile Adams would take it on road trips up the California coast or drive it out to dinner. It even appeared in a photo shoot with McQueen for Cosmopolitan magazine. The Lusso was expected to fetch between $800,000 and $1.2m, but sold for $2.3m to an anonymous buyer.

Mike Regalia, the seller, bought the car in 1997 for a small fraction of that. But he says the money wasn’t the biggest thrill of a restoration project that had taken more than six years and 4,000 hours, most of it completed himself.

“The most exciting part of the whole experience for me was the moment the car was driven up on the ramp at Christie’s and the crowd went crazy,” he says. “Everybody stood up and they were clapping. I’ve been to a lot of auctions and that’s only happened a handful of times. I’m not going to sound stupid and say the difference between, say, $500,000 and $2.3m isn’t significant, but for me the money was just a measuring stick of people seeing the car and feeling it was something special.”

Certainly, the car deserved attention. When Regalia bought the Ferrari, it had spent most of the previous 20 years in storage in San Francisco and was not in great condition. He stripped it down to its frame and restored it to McQueen’s original specifications, metallic, chestnut brown paintwork and light beige interior, with McQueen’s original licence plate. He also researched the car’s history – unearthing the original order documentation between the US importer, Luigi Chinetti, and Ferrari, and talking to McQueen’s friends, his son Chad McQueen and others who had known McQueen when he owned it.

The fact that this was a beautiful restoration of one of only 350 Lussos made by Ferrari, with a documented provenance and an iconic former owner, the King of Cool himself, boosted its value.

But Regalia, who has worked in the classic car restoration industry for 30 years, says that the wider investment-grade market for classic cars – those that have a documented history and are in original, or accurately restored, condition and range in price from $30,000 to several million dollars – is also going from strength to strength. The right classic car, unlike new ones, can see its value substantially increase in one or two years.

That has not always been the case. “The marketplace has fundamentally changed since the 1980s. It’s not driven by speculators any more but by people who really love the cars,” Regalia says. That has led to more buy-and-hold investors and an increase in values. Regalia cites the Ferraris of the 1960s and 1970s that have appreciated 5 per cent to 10 per cent over the past five years, but have now seen some big jumps in value. “Like the Bugattis of the prewar era, 1960s and 1970s Ferraris are something that everybody wants. It’s the same for the early Mercedes, the Alfa Romeos, the Aston Martins.”

He says the appreciation in the market for the best and rarest classic cars comes down to supply and demand. “Most of the good original and high-quality restored cars are already in collections, yet there’s growing demand from new buyers in the far east.”

Certainly classic marques with a famous heritage, such as Aston Martin, Ferrari, Maserati, Duesenberg, Packard, Alfa Romeo and Porsche, are good long-term investments. Rob Myers, founder of RM Auctions in Ontario, Canada, the largest auction house specialising in investment-grade quality classic cars, says low production numbers and survival rates can dramatically enhance values.

“For example, a Duesenberg will always appreciate in value as there were only some 400 produced and they were the most luxurious hand-built cars ever made,” he says. “Most of them are valued at $1m or more.”

Vintage racing cars are also valuable. In fact, when it comes to Ferraris, McQueen’s Lusso was no­where near the top price for a recent sale. In May a Le Mans-winning 1962 Ferrari 330 TRI/LM Testa Rossa fetched $9.3m at an auction of vintage Ferraris at the carmaker’s headquarters in Maranello, Italy, held by RM Auctions, Sotheby’s and Ferrari.

RM Auctions has sold plenty of cars with celebrity provenance in the past, such as Al Capone’s armour-plated 1928 Cadillac and Jackie Kennedy’s Lincoln Continental White House limousine. Last year it sold one of four 1964 Aston Martin DB5s produced for the James Bond films, complete with the full set of 007 spy gadgetry such as a retract­able bullet-proof shield, revolving numberplates and a wheel-mounted tyre slasher. None topped the price of the Le Mans Ferrari.

“For some people, having a car with a celebrity owner puts quite a premium on it,” says Sandra Kesky Button, chairman of the Pebble Beach Concours D’Elegance. “But if you have an important car with a race history, especially a winning race history by a famous driver, that has so much more value.”

Button should know. The Pebble Beach Concours, held every August on the famous golf course of the same name on the Monterey peninsula, California, has been running since 1950 and is probably the best-known event in the world for classic car owners. This year about 190 cars were judged in 27 classes, with entrants bringing cars from 12 countries.

It’s the pinnacle of a week-long classic car extravaganza, which includes several large auctions in the Monterey area and the Concours Tour, which this year involved more than 150 vintage Aston Martins, Duesenbergs and Ferraris, among others, bombing it down Highway 1 on the 60-mile drive through the Monterey Peninsula and along the Pacific Ocean.

Winning a prize at a concours event, and certainly the coveted best in show award at the Pebble Beach Concours, is something that can enhance a car’s provenance and increase its value.

But events such as Pebble Beach also give owners a chance to show unrestored vehicles. The 2007 Pebble Beach Concours featured a 1950 Ferrari 160MM Touring Barchetta, which had been unearthed in a back yard in the Arizona desert under a pile of carpets. These cars are also becoming very valuable. As one market expert puts it: “There are few enough restored cars around. How many un­restored cars will be left in 50 years?”

Myers says it’s necessary to think carefully about whether value will be added to a car through restoration, but points out that most of the cars that pass through his company’s restoration business increase greatly in value with proper restoration because of their rarity and provenance.

If restoration is the goal, there are plenty of companies that can help, such as RM Auctions, which also offers a range of private client services, including appraisals, acquisitions, shipping and estate planning. However, the costs and time needed vary. The average minimum professional restoration time is one to two years, according to Button, but can take up to 10 years, and costs run from $50,000 to $500,000. That is why Regalia advises buying a car that needs as little work as possible. “The restoration process can be trying at the best of times, but if you suddenly discover that you need to spend $20,000 to $50,000 on a new engine, that can take a lot of the fun out of it.” Aside from restoration, there are plenty of other costs to consider – for example, what a car’s yearly maintenance, storage and insurance costs will be.

Above all, it’s important to do the homework before buying, to talk to car clubs or other specialists in that particular marque, to track auction results and market prices, to research a car’s provenance and also to consider hiring a professional to appraise it. Button believes one of the biggest changes to the market has been the evolution of the internet as a source of research information. “I would say that collectors as a group are now much better informed,” she says.

Finally, it’s important to buy a classic car to enjoy and drive, not on the belief that it will make money.

Regalia, although excited about his other cars under restoration, admits that parting company with the McQueen Lusso was tough. After all, he’d driven it for three years before he devoted so much time to its restoration, and it took him a year to decide whether to sell. “I’d already had my share of sleepless nights about this, but two weeks after the sale, I was sending some further documentation to Christie’s and found some original photos from when I first bought the car,” he says. “It reminded me of looking at a photo of a lost love. But then I put the pictures down and said: ‘I’m not going to do this to myself. What’s done is done’.”

Copyright The Financial Times Limited 2017. All rights reserved. You may share using our article tools. Please don't copy articles from FT.com and redistribute by email or post to the web.