Leake and Kruse Auction in Dallas this weekend

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From today's Dallas Morning News:

http://www.dallasnews.com/latestnews...ion.13772.html


Hot rods become hot investments

You can sit in them, you can smell them, you can drive them, and they aren't Enron'

11/22/2002

By TERRY BOX / The Dallas Morning News




Phillipe Garcia waxes Richard Hyde's 1971 Boss 351 Mustang to prepare it for the annual Leake and Kruse International Dallas Collector Car Show & Auction starting Friday at Market Hall.
The lure: Over the last decade, many of these rumbling blasts from the past have appreciated in value 10 percent or more annually – pumped up partly, of late, by money fleeing Wall Street.


On bad stock days, Steve Todhunter seeks shelter in his garage.

There, he keeps a collection of Chrysler muscle cars, and Mr. Todhunter contends that a big-block Dodge offers greater returns these days than many high-yield stocks on Wall Street.

With the equities markets sputtering and stalling, Mr. Todhunter and thousands of others are investing in smoother-running vehicles: '50s classics, late '60s and early '70s muscle cars, hot rods and customs.

"On Sept. 11, I saw my [stock] portfolio drop 20 percent," said Mr. Todhunter, 42, the owner of a construction company outside Tulsa whose collection includes 20 cars. "I opened my garage and knew that my investments there were still growing."

The robust health of the collector-car market probably bodes well for the 30th annual Leake and Kruse International Dallas Collector Car Show & Auction starting Friday at Market Hall. More than 500 cars and trucks will be offered for sale, and auction officials expect to take in about $5 million at the three-day event.

"A few years ago, everybody was selling everything they owned just to get into the stock market," said Richard Sevenoaks, president of Tulsa-based Leake Auction. "Now, people are selling their stock to get back into the car market."

Three years ago, the average car or truck at a Leake Auction sold for about $12,000, Mr. Sevenoaks said. Today, the average is "around $18,000," he said.

And many of the rarer vehicles are selling for vastly more. Mr. Todhunter, for example, is bringing to the Dallas auction a 1970 Dodge Challenger RT powered by an axle-twisting 440-cubic-inch V8. He expects to get "somewhere in the $40s" for the car.

"You could have purchased this car for $10,000 or $12,000 10 years ago," Mr. Todhunter said.

Moreover, many Chrysler muscle cars equipped with the automaker's legendary 425-horsepower Hemi V8 regularly sell now for more than $100,000. At an auction earlier this year, even veteran collectors were left speechless when a rare 1971 Plymouth Hemi 'Cuda convertible sold for $700,000.

"We are looking at the Duesenbergs of our time," Mr. Todhunter said, referring to the grand and extremely expensive touring cars from the 1930s, some of which have sold for $1 million or more.

Ron Kowalke, auction editor of Old Cars Weekly, says: "We are seeing the next evolution of the hobby."

A collector car is a loosely defined vehicle. Basically, they are older cars – '50s, '60s and some '70s models – that were desirable when they were new.

Most 1965 Mustangs or '66 Chevelle SS's or '68 Plymouth Road Runners are potentially collectible. A '63 four-door Ford sedan or a '67 Chrysler station wagon probably is not, officials say.

Many of the vehicles at the Dallas auction will be "drivers" – nice, clean cars that run well and look good but aren't rare or perfectly restored. Most of those cars should sell for less than $30,000.

At the other end of the spectrum, however, are the exotics – a term not often applied to mass-produced American muscle cars.

Among those in the upper tier at the Dallas auction will be a '70 Chevelle LS6 convertible that features a 450-horsepower, 454-cubic-inch V8 and is said to be one of 17 produced; an extremely rare '69 Camaro with an aluminum 427-cubic-inch V8; and an equally rare '67 Plymouth Belvedere with a Hemi.

All of those cars are likely to fetch six-figure prices.

Garland Ford dealer Jerry Reynolds, who has owned a dozen or so collector cars, said he noticed the first real jump in prices about three years ago.

Mr. Reynolds, managing partner of Prestige Ford, has a '69 Mustang Mach 1, an award-winning '56 hot-rod Ford pickup and the '02 Jaguar XK8 that was used in a recent Austin Powers movie.

"Many people have pulled out of the [stock] market and have got their money sitting in CDs and IRAs, earning 2 percent a year," he said. "They are watching these cars go up at least 10 percent a year. People who can afford to buy are coming out of the woodwork, and you can't blame them."

The demand for muscle cars is even showing up at Unique Motorcars in Irving, which restores and highly modifies '67 and '68 Mustangs. The company's 400-plus horsepower cars start at $80,000 and are being built in association with Carroll Shelby, the renowned Texas racer who developed the Cobra sports/muscle car in the '60s.

"The individuals I'm dealing with are not sticking money into the stock market," said Doug Hasty, president and chief executive of Unique Motorcars, who expects to have orders for 25 cars by the end of the year. "I'm seeing a lot of first-time buyers."

"There's a lot of liquid money out there," added his marketing partner, Steve Sanderson, president of Sanderson Sales and Marketing in Plano. "They are uncomfortable with the stock market."

Mr. Kowalke, the auction editor at Old Cars Weekly, said he traces the most recent spike in prices to the weeks after Sept. 11.

"The money these cars are bringing has not been seen in 11 or 12 years," he said. "These rare muscle cars are investment cars, cars on which people are almost guaranteed to get their money back."

In the late 1980s, with the stock market again in shambles and real estate values depressed, investors turned to collector cars.

Many were speculators just looking to purchase anything with potential long-term value, industry officials say. They drove the market to unprecedented heights and then pulled out, causing collector-car values to collapse.

"Back then, a lot of the stupid money – $10 million for a Ferrari – came from people in Japan and Europe," said Mr. Kowalke, also editor of the Old Cars Price Guide. "We are not seeing that overseas pull today.

"When you build value on the buyers today – car lovers – I think it will have more long-term stability."

Steve Hudiburg, for one, is counting on it – and counting big. A second-generation car dealer in Oklahoma City and Tulsa, Mr. Hudiburg has been collecting cars for 20 years.

He is bringing the '70 Chevelle LS6 convertible to the Dallas auction, a car he bought just 10 months ago at another auction for $160,000.

Mr. Hudiburg, who maintains a private collection of cars and has a collector-car business, admits he was a little uneasy when he heard that his associates had paid $160,000 for the dark blue Chevelle.

Whatever concerns he had evaporated two days later when the car was being loaded into a transporter truck for the drive back to Oklahoma. Another collector walked up and offered Mr. Hudiburg $190,000 for the car, which he turned down.

He hopes to get more than $200,000 for the Chevelle this weekend in Dallas.

"I always thought it was safer to throw money into cars than anywhere else – including the stock market," said Mr. Hudiburg, 42, who owns more than 30 cars. "You can sit in them, you can smell them, you can drive them, and they aren't Enron."

E-mail tbox@dallasnews.com










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