Catering to collectable car owners is a growing trend

Pricing for classic cars – especially well-kept and desirable models from the 1950s, ‘60s and ‘70s – has more than doubled over the last five years and is up almost 30 percent in just the past 12 months, with vintage autos surpassing fine art as a prime investment strategy for wealthy collectors.

“We continue to see strength at the top of the market,” says McKeel Hagerty, president and CEO of the Hagerty specialty vehicle insurance firm. “But when examined from a global economic standpoint, it still is an issue of supply and demand. There’s a growing group of capable collectors chasing a limited supply of great cars.”

And while only a fortunate few have the resources to pursue the top rides and the resulting top bucks, the overall collectable trend does present opportunities for aftermarket businesses offering products and services directed toward restoration, custom and racing enthusiasts eager to maintain top value for their prized vehicles.

Even hobbyists of more modest means remain eager to spend at the local level within the segment, as evidenced by the crowds of industry buyers perusing the aisles at November’s Specialty Equipment Market Association (SEMA) Show in Las Vegas.

“Being a real enthusiast is not about having the flashiest vehicle, but about the behind-the-scenes tinkering and lifelong camaraderie that shines through and through,” observes Tony Marini, executive director of Nevada’s Hot August Nights, billed as the largest classic car and nostalgia event in the U.S. with venues spread across the Reno, Sparks and Lake Tahoe areas.

Marini is among the judges of the Shell V-Power “Ultimate Enthusiast” Contest that involves entrants describing their automotive passions. “The response to the ‘Ultimate Enthusiast’ contest last year was phenomenal,” reports Elizabeth Hudson, Shell’s fuel category manager. She expects an equally high level of interest in the 2013 edition in which the top three finalists will be flown to Scottsdale, Ariz., for January’s gala 43rd Annual Barrett-Jackson Collector Car Auction.

In addition to a national television audience, nearly 70,000 people attended Barrett-Jackson’s Annual Las Vegas auction in September that grossed more than $32 million in sales, representing a 41 percent increase over 2012’s tally; a record-breaking 657 consignments were on the block.

“Results from the Las Vegas auction demonstrate that the collector car market is incredibly strong within all segments of the hobby,” says Craig Jackson, Barrett-Jackson’s chairman and CEO.

Last year Pep Boys entered into a partnership with Barrett-Jackson to become the exclusive distributor of the auction house’s line of car care products within its new Automobile Restoration System.

The retailer/wholesaler now offers “specialized paints, world-class finishing and detailing products to all of our automotive enthusiast customers, from the collector to the daily driver,” says Scott Webb, Pep Boys’ executive vice president of merchandising and marketing. The package provides “an easy, unique way to complete the restoration of car projects from start to finish,” he notes.

Barrett-Jackson’s licensed Automobile Restoration System is the result of a strategic partnership among abrasives manufacturer Ali Industries, paint producer Sherwin-Williams and surface-finishing products supplier Farecla.

When the myclassicgarage.com website made its online debut, the car collectors who established the venture experienced an unexpected and unprecedented level of participation, according to marketing director Jim Dodge. “We didn’t start off with a goal in mind of reaching 100,000 users in less than a year,” he says. “User adoption was something we discussed, but we decided early on to ruthlessly focus on what would serve enthusiasts and collectors and let the chips fall where they may. That philosophy has served us well.”

Citing an intent to “bring legitimacy to the marketplace,” founder Joseph Carroll notes that “too much of our hobby is ‘buyer beware’ and involves sophisticated sellers taking advantage of inexperienced buyers who are new to the hobby. Not in our marketplace.”

“The Internet is thought of as the place to get information, but a classic car database didn’t exist,” says Dodge, extolling the virtues of the virtual MCG Knowledge Base. “We did not take any shortcuts with the Knowledge Base,” he adds.

Performance specifications, available colors, year-to-year differences, photos and more details are currently available on 26 nameplates from nine manufacturers ranging from Buick to Shelby.

“Production numbers for a particular year, make and model are a valuable resource when writing descriptions for classic car dealers,” Dodge points out, adding that “factory paint specs for a year, make and model are useful for anyone planning a restoration. There’s no silver bullet, and we continue to do the hard work of adding makes and models to grow this portion of our site as a valuable resource for car enthusiasts.”

While routine repairs and maintenance is the shop’s primary business, providing localized options directed at the collector crowd and performance buffs is an important element at Brad’s Service Center in Chicopee, Mass., a 2013 Motor Age Top Shop. Seasonal preparations and other offerings for customs-oriented customers account for 2 percent to 4 percent of the operation’s annual sales growth, according to owner Brad Leveillee.

“We see them in the spring – groups of them – and then we see them again in the fall when we get their cars ready for the winter,” Leveillee reports. Leveraged by word-of-mouth referrals and car club recommendations, “There are a lot of regular folks and some wealthy people too,” he notes.

Sited on three acres and seeking to utilize his excess land, Leveillee is currently constructing a 15-car to 18-car secured storage facility at a cost of $120,000 with the stalls expected to be priced at $150 per month. “We’re keeping it reasonable,” he explains.

“We’ve got a big market for that. We’ve taken some polls, and people are willing to sign a year-long lease in advance,” says Leveillee. “A lot of these guys have only one-car or two-car garages at home. It snows quite a bit here, and they want to put their street cars in their garages.”

Far more deluxe accommodations are afoot at the New Jersey Motorsports Park, where pricing of a 500-square-foot space at The Exotic Car Garages at the Villas at Breighton within the expansive track starts at $62,500. Numerous features are among the standard amenities. Seemingly suitable to move the family in and set up housekeeping, available upgrades include air compressors, epoxy floors, custom wall coverings and built-in cabinetry, kitchens, bathrooms/showers, lounges, designer bars, wine rooms, home theaters, lofts and viewing decks.

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