January 25, 2005
A stampede of horsepower is on its way to the Valley, led by opening festivities this week of Scottsdale’s Barrett-Jackson Classic Car Auction.
The 34th annual carbuying extravaganza, which began as a meeting between two car buffs, has blossomed into an international event that draws tens of thousands of spectators, thousands of well-heeled buyers and even more viewers to a cable-television channel that carries the auction live.
But the homegrown event isn’t the only game in town.
By the end of the month, car enthusiasts will have thundered to six major car auctions in the Valley, leaving behind a fortune in hotel fees, entertainment and food expenses and car sales.
"Synergy creates an en- vironment that is supportive of everyone," said Drew Alcazar, owner of Russo and Steele Auctions Inc., one of the six auctions competing for buyers this month. "I believe that we are all stronger together than we are apart."
Growth in the industry, he said, can be attributed to marketing strategies and state government policies regulating the business.
"The most unique element is that Arizona is a ‘direct title state,’ " Alcazer said. "An auction house has the ability to transfer a title directly from the seller to the buyer."
Alcazar said that in other states, that is not possible or it is so difficult that auction houses would rather take their business elsewhere.
Car auctions in Scottsdale were first held by aficionados Tom Barrett and Russ Jackson in 1971. Since then several other auctions have sprung up in the Valley.
Collectors from colder weather states, mostly baby boomers, have been coming to Arizona for decades because the desert environment preserves automobiles with little or no rust, said Al Trachtman, a vintage-car collector from Carefree.
Upon retirement, many of those same collectors have left the colder weather for Arizona’s sunshine, creating a concentration of enthusiasts with disposable income. Enriching the market further are the ever increasing number of California transplants, he said.
Laura McMurchie, vice president of communications for the Scottsdale Convention and Visitors Bureau said, "Scottsdale is very well positioned with the type of people who live here to attract that affluent buyer."
Collectively, the shows offer something for every car enthusiast, from the backyard mechanic looking for an inexpensive project to the highend investor looking to sink $2.5 million into a 1962 Aston Martin Zagato coupe.
Two of the largest and most prestigious auctions will overlap in Scottsdale. The 34th annual Barrett-Jackson public auction begins Wednesday and lasts through Sunday at WestWorld of Scottsdale.
The fifth Russo and Steele "Collector Cars in Scottsdale" auction and charity gala will be Thursday through Saturday at Scottsdale Road and Mayo Boulevard.
Other auctions and shows are the Big Boys Classic Car Spectacular, now under way until Jan. 31 at Big Surf; the 34th Kruse International Collector Car Auction that ends today at Phoenix International Raceway; the RM Vintage Motor Cars in Arizona auction Friday at the Arizona Biltmore Resort and Spa in Phoenix; and the Silver Collector Car Auction which concluded Monday at the Fort McDowell Casino.
Craig Jackson said figures for last year’s Barrett-Jackson auction showed 185,000 people passed through its gates. There were 3,000 registered bidders. By event’s end about $73 million was poured into Scottsdale’s economy. This year they expect to reach 4,000 bidders with 900 classic and collectable cars for sale.
According to Terry Lobzun, public relations officer for RM Auctions Inc., sales at last year’s auction totaled $10.6 million. This year’s projection is $15 million. The average auction lot price for RM is $175,000.
RM estimates that their customers spend an average of $5,000-$10,000 in travel expenses in Arizona during the event.
Scottsdale resident Jay Snyder has been restoring and collecting classic cars for about 35 years. He said that during that time he has owned about 250 cars. He now specializes in buying and selling Ford Shelby Cobras.
"The cars that people are buying now were fun when they were manufactured," Snyder said. "I’m 60 and I could have never afforded, when I was young, a Shelby convertible or something like that."
Snyder said restoring or buying and selling classic cars should be approached as a hobby and not for the purpose of making money.
Individuals considering buying a classic or vintage car as an investment should beware: The market is volatile and has cycles just like the stock market.
During the 1980s the stock market grew very weak. A lot of people with money to invest were looking for alternatives.
Trachtman said investors started buying Ferraris, old Porsches, Jaguars and other collectables, driving prices through the roof.
He said the market eventually deflated rapidly, leaving numerous investors with overpriced cars and no way to get out from under them.