Posted by Paul Cook in Kempner, Texas on Sunday, February 04, 2007 at 17:09:14 :
Below was a Post concerning Barrett Jackson autions and certain ethics issues. Here are my thoughts in an overview of pricing and related issues.
For many years I subscribed to, and avidly perused the pages of Hemmings Motor News. Nothing else had any priority in my life from the moment I removed it from my mail box until I had read all the ads. I checked on every car I had ever owned, every car I wished I had bought, and every car I wished to own. I have had a life-long thing for wooden boats and looked at the boats for sale as well. And there were the petroliana items, too.
I called the sellers of many items. When ever possible, I scheduled visits to sellers when I traveled. Some sellers admitted little knowledge of the vehicle advertised other than the fact that a friend assured him it was rare and valuable and he should advertise it in Hemmings to get a great price.
It was with great regret that I gradually came to the conclusion that what I once held to be the Bible for car collectors had gradually ameliorated into a glorified "Thrifty Nickel" type publication. Hemmings had no responsibility to verify each of the growing number of advertisements posted (I'm sure there was a disclaimer somewhere in the increasingly finer print.) and there was little chance for quality control. So I exercised my only quality control option and I let my subscription expire. One by one I have watched other established pillars of the collector vehicle hobby lose their credibility - at least in my assessment.
Then, there was eBay. There is endless band width consumed on our various Forums discussing the inaccurate descriptions of the vehicles listed for sale there. Some of these descriptions are based on the uninformed seller being told his vehicle was rare and valuable and he should advertise it on eBay to get a great price. In some cases the seller knows little about it, but has the good sense to make it available to legitimate collectors instead of junking it. In the best cases, the seller is a knowledgeable collector wanting to share with other collectors. However, the cases of intentional deceit are becoming more obvious each day.
The unreal increase in collector vehicle prices is based on several factors. Not in any particular, these are increased wealth, the need for status (symbols), and the craving for instant gratification. There are other lesser ones, but let's deal with these.
Many individuals have increased personal wealth. Even in retirement, I see my savings account balance showing a little increase each month. I have been able to go to Power Wagon events and even buy another Power Wagon or two - as long as I make wise choices. (Of course, raising the minimum wage without increasing pensions to match the immediate increase in the overall cost of living may put an end to that.)
Some politicians are decrying the widening of the gap between "rich" and "poor" - terms which they conveniently fail to quantify. Actually, as all aspects of banking and investing, commerce, manufacturing, and marketing expand, they all become more specialized. When I was in college, I had a summer job at a local truck manufacturing plant. Because I had studied drafting in my Mechanical Engineering curriculum and could read blueprints, I was working as a quality control inspector on a subassembly line. Other college students who had no specific skills related to truck manufacturing worked as "sweepers", a general labor category. My training qualified me for a higher wage.
That was in 1957. It is true today. You can't drop out of high school and expect to qualify for many available jobs that provide a significant amount of "disposable income." Generally, the terms "trained" and "untrained" are closely related to "rich" and "poor".
A unique category of "rich" has appeared. These are what I call the "paper rich" the folks who do not have the assets but have a great line of credit. Recently, many folks have been involved in "flipping" real estate. Many have realized actual wealth and have the money in the bank.
The "paper rich" have invested in real estate and established lines of credit secured solely with the anticipated worth of the real estate they hold. They do not have the money in the bank but have been able to buy things - often without regard to getting their money's worth.
And here is where the issue of increased personal wealth shows up. When it becomes excessive, Wikipedia has this to say:
Nouveau riche (French: "new rich") is a term, usually derogatory, to describe persons who acquire wealth within their generation, and spend it conspicuously. The implication is that, being of lower- or middle-class origin, these individuals lack the taste to use wealth properly. Hence, this class of people is sometimes ill-regarded by old money as culturally inferior, comparatively lacking in pedigree and subtlety.
The benchmark of the nouveau riche is their acquiring possessions which are touted to them as being the sort of things that rich people would possess. "Old money" in traditional European societies have inherited a large house filled with well-built furniture acquired over the centuries. Their cars are not necessarily the most expensive and capable, but have a bit of restraint, or else they disguise their social position in cars of the middle rank. During the Great Depression, Chryslers, for example, were sold to such people for this reason. They fit within a social milieu in which everyone knows everyone else and has for generations. The nouveau riche in essence try to crash this party by buying everything they need to show that they have money not merely within one generation but within a few years.
Above, I said, "The unreal increase in collector vehicle prices is based on … the need for status (symbols)." In the Wikipedia piece, "spend it conspicuously" refers to the status issue. It appears that it may be more important for some of these buyers to boast of the amount they paid for a vehicle than it is to have that particular vehicle. I made a very bad Power Wagon purchase. I certainly would not boast about the price I paid when the true value was nowhere close to that price. There are two sides to this status issue - one is having the vehicle to show off - the other is all about the price.
As the child of parents who endured the Great Depression, I was forced to exercise constraint in every thing I spent or acquired. This earned us the name, "Silent Generation". Actually I and most of my pre-baby-boomer contemporaries did not practice near as much constraint. We were almost exclusively guided by the real limits of our financial situation. Sociologists, authors, and others named the adult group that came after my parents "baby boomers." Then there was the "Beat Generation", "Generation Jones", "Baby Busters" (also known as the "Sunshine Generation"), Generation X", "MTV Generation", "Boomerang Generation", "Generation Y", and yet other overlapping and indistinct groupings.
Some "generations" have only a few years' separation but the term, "generation" has been applied to succeeding adult groups although they are defined by their values and not by the time line. As we old timers have observed these succeeding generations and their changing values, the one think that is constant is the movement away from practicing any kind of restraint.
Each generation has placed more importance on instant gratification. " I want it! I want it now! I don't care if the price exceeds the value. In fact, I don't really care about the price - all I want to know is how much are my monthly payments."
This is what feeds the inflated collector prices. The people who are asking and paying these inflated prices don't know we exist. Through our various Power Wagon publications and Forums, we share a body of knowledge that includes reasonable prices and values for these great trucks. There are truly some Power Wagons with a price above $30,000 that reflects their reasonable value. And there are some that are hardly worth $1500. Most of us are not fooled by some seller's uninformed or bogus description. We get together and compare trucks and discuss values and prices. I, for one, do not know any of us who is here for the wrong reasons. And I feel that we are being treated pretty fairly by sellers on the Forums and in publications like PWA because we are part of this very special global Power Wagon family.
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