Classic cars can cost millions, but are they good investments?
Peter Mullin, owner of one of the world's largest private collections of classic French automobiles, points to a 1935 Hispano-Suiza J12 Cabriolet sitting among 60 other cars in his museum in Southern California.
"This is the finest car ever made," Mullin says. "At 100 miles an hour, you couldn't even tell the engine was on."
He is just warming up at his Oxnard-based Mullin Automotive Museum, which was designed to evoke a 1930s art deco auto salon in Paris. He caresses the swooping fender of a red-and-black 1938 Bugatti Type 57C Atalante coupe, designed by the company founder's son, Jean Bugatti.
"I love all the French cars, but Bugatti is my favorite among favorites," Mullin says. "It's the ultimate car in engineering, design, performance."
The museum's creme de la creme spins on a pedestal in the middle of the 46,800-square-foot building. In May, an anonymous buyer paid more than $30 million for this 1936 Bugatti Type 57SC Atlantic, a silver-blue coupe with a raised spine that runs the length of the car. Mullin declined to comment on news media reports that he was the buyer.
It's the highest price ever paid for a car, topping the old record by about $2 million. The same Bugatti sold in 1971 for $59,000.
Mullin belongs to a club of about 100 collectors worldwide with the money to buy the most expensive classics, says Simon Kidston, a Geneva-based classic car adviser and broker.
Rich collectors are an eclectic lot. They include comedian Jerry Seinfeld, who collects Porsches and who appeared in a 30-minute cable program extolling the brand; Jim Glickenhaus, a Wall Street investor who covets Ferraris; and Chris Evans, a British television and radio host who paid $10.9 million in 2008 for a 1961 Ferrari 250 GT SWB California Spyder once owned by actor James Coburn.
A semi-retired founder of a Los Angeles executive-benefits-consulting and asset-management firm, Mullin, 69, began buying vintage cars in 1981. He now has 140.
"It starts with an interest, turns to passion, then migrates to obsession," said Mullin, chairman of Portland, Ore.-based M Financial Group.
Collectors are pumping money into the classic-car market like never before, driving up prices for the world's most famous models of Bugattis, Ferraris, Mercedes-Benzes and Rolls-Royces. Enthusiasts are bewitched by their curvaceous bodies; handcrafted leather stitching; racing prowess, with 200-plus-horsepower engines; famous owners; and even their possible investment value.
With the stock market in the doldrums, investors seeking hard assets are turning to vintage cars, often for more than $1 million, says Keith Martin, publisher of Sports CarMarket magazine in Portland.