Challenge Accepted
Hi Friends!
It’s getting harder and harder to deny that the current market that we’re in is a wild one. By no stretch am I indicating that this is a bad thing either. Drama creates attention and attention creates intrigue, which creates participation and ultimately, participation is what makes marketplaces like this one really function at its highest levels.
In hobbies and industries like this one, there’s always scenarios that raise eyebrows and get people talking. Usually, words like “crazy” or “insanity” get thrown around in situations like this but that’s what defines eras and keeps things interesting. Over the last week or so, I started getting a ton of emails regarding Ferrari 360 Challenge Stradales. In particular, a 9,000 mile example offered on Bring-a-Trailer which closed, unsold at a seemingly staggering $825,000 on March 20th. Almost everybody who reached out had almost exactly the same things to say.
Here’s the breakdown:
Q: How was this car allowed to be offered with a reserve like this and why didn’t it sell?
A: Honestly, I think it’s pretty simple: They thought they could get it and then the seller didn’t do much to help. I also think there’s a pretty logical explanation for why we’ve seen activity like this, most specifically with early modern classic or late model Ferraris in particular on BAT. If you look at the top sales of 360 CS in particular over the last couple of months, Bring-a-Trailer is clearly beginning to create an ecosystem for cars like this and they very recently banged one of these cars through for $971,000. Granted, that was a lower mileage car that was probably optioned a little bit more desirably, but if you hit a home run at your last at bat, it’s hard not to try to swing for the fences again. They know what these cars are capable of and what direction they are going (as does Silver Arrow Cars, who is one of BAT’s most prolific dealers and also the high bidder on the lot in question) and what may seem crazy today, may be a missed opportunity in hindsight. Truly exceptional examples aren’t ever going to get cheaper than this. This one was definitely borderline, but as we’ve said here before, a rising tide lifts all ships. Bring-a-Trailer is just trying to add more water.
Q: These can’t possibly be million-dollar cars, can they?
A: Oh, they can and they are. Although, I think the 16M is probably the standard bearer here, there’s definitely going to be people that prefer the rawness of the 360 CS and with only 1,300 examples produced (a lot of which aren’t so nice), the demand is definitely going to be there. What we’re seeing here is really three distinctive microclimates for the 360 CS:
Elite Examples ($500k +)
These are the examples that we’re talking about in places like this. These are the cars that are at or are slightly cracking the million-dollar mark already and they are the best of the best. Examples of this would be the Bachman Collection car sold by Mecum in January for $1,071,000 and the 2,500 mile example sold on BAT a couple of months ago for $971k as mentioned above. These are unicorn cars ultimately that are not really the real market for these things and although great noise makers, are the exception to the rule for sure.
The Dead Zone ($325k-$500k)
This is where we’ve seen the majority of the no sales occur over the last year or so. These are cars that are too expensive for casual or aspirational buyers, but not clean enough for high dollar collectors. This is always the most difficult range to be in for sellers of virtually everything and it seems it’s where most of these cars that people wind up taking back home or post sale out are living for sure. These are your average spec, 7,000 to 15,000 mile cars that may have a story or two attached or some aftermarket shenanigans may have occurred somewhere at some point.
Problem Cars (Sub $300k)
These are going to be your high mileage, questionable cars that may have little to no maintenance history, lots of evidence of abuse, etc. Let’s not forget, that these were essentially race spec’d cars, for quite a while they were like $60,000 and people definitely drove them hard. They also likely fell into hands of people that wanted one, but couldn’t really maintain it properly and there may be some shaky decisions that were made there as a result as well. Still, these may be too much of a bargain with too much of a potential upside for a lot of people to pass up. Especially right now. There’s a pretty large market for these and people will take the risk if the price is right. Cars in this range are pretty easy sell right now as a result.
I know we keep going back to the Bachman Collection results, but for cars like this, this sale was a really significant springboard. There’s definitely cars that are in line for glory prior to these really getting there, but these should be pretty bankable seven-figure cars sooner rather than later. We need to keep in mind that these have just barely reached their classic status and if we look back comparatively at things like Ferrari 275 GTB for example, at the same point in its cycle (approximately 1992), that was $150,000 car ($330k or so in today’s money). Point is, these have a lot of road left in front of them.
Q: Is BAT losing control over its consigners?
A: in my opinion, this is a pretty valid question. Traditionally, Bring-a-Trailer has wielded somewhat of an iron fist over their consigner base. They tend to bottleneck cars in regard to market patterns and trends and they tend to be really protective of their sell-through rate. This said, we’ve seen some cracks in the pavement over the last couple of months, including an obvious AI car (which we covered here) and a few other late model Ferrari examples that seemed to hit better than market expectations, but still remained unsold (this one raised eyebrows at the time for sure). One of the first signs that an auction company is in trouble is a clear failure to control their consigners. You’ll see this in smaller, mid-level and regional auction houses that are starting out as well. They’re so desperate to run cars and make numbers that they pretty much let anybody run anything, regardless of how ridiculous their expectations may be. With Bring-a-Trailer, there’s obviously a lot of corporate motivation (which as we’re seeing basically everywhere isn’t usually a good thing), but the fact of the matter is, BAT does tremendous volume and if you look at the percentage of their misses over how often they do everything correctly, this is a very small number of lots overall. While I do think it’s pretty clear at this point that BAT is moving away from the hyper-curated landscape that we’ve all sort of become accustomed to over the last decade or so, I think we’d be pretty hard-pressed to say at this point that the inmates have overrun the asylum.
Q: What kind of crazy marketplace are we in?
A: I don’t think this marketplace is crazy at all in the grand scheme of things. I think what we’re seeing is an evolving market. We’re transitioning away from the norms that we’ve all gotten so comfortable with over the past couple of decades and we’re moving into a new era. As a result, this marketplace is still defining itself and writing its rules. Due to the general enthusiasm not only from collectors and car fans, but the financial sector and Corporate America as well (something that is developing in directions we’ve never seen before as we speak), limits are being tested and new boundaries are being set. It’s clear that the canary in the coal mine once again is Ferrari. Although, the same wants and desires are clearly prevalent, they are now on the terms of a new generation. I’ll be the first to admit, I will never be as comfortable with carbon fiber and plastic as I am with wood and metal and none of this stuff really feels classic to me (I’m in my mid-40s), but the reality is, we are here now and situations like this will become the norm.
If you’re interested in throwing your gloves in the ring on a 360 CS, there’s currently one on offer with duPont Registry. Current high bid is $630k and it ends tomorrow (Monday). With 17,000 miles on the clock, this already seems like all the money here too. It’ll be interesting to see what happens….
That’s it for this week……
Darin Roberge