SLC on Auction in Monterey
- Thread starter awatkins
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Seymour Snerd
Lifetime Supporter
Roger, let me take another run at the question Zoey asked and I'm struggling with. The premise is this: you have a kit car that you built. You know all the numbers on what it cost you and how much time you spent. What process should you go through to decide your offering price? I proposed one "process." I'm looking for others, or corrections to mine (and Dean suggested some corrections). At this point, FWIW, I'm completely uninterested in abstract discussions of value, and whether it's possible to determine that. I already agreed it isn't possible (see this post: http://www.gt40s.com/forum/rcr-forum-rcr40-slc-p4-mkiv/37788-slc-auction-monterey.html#post379234)
So, if you had spent X dollars and Y hours building an SLC, how would decide it's price? What other information would you try to obtain (if any)?
For a nearly new car, I'd start at X (sorry!) and reduce the price each month until it sold (assuming that you need to sell). With such a small market, you might be able to get more, if the right people are looking at the right time and the build is well documented.
There seem to be the people that enjoy building cars (and will often keep them, events allowing) and those that just want to play
, looking for cheap performance.As has been mentioned, Ultimas would be a good comparison.
Seymour Snerd
Lifetime Supporter
OK, then is sounds like we're kind of zeroing in on "parts cost" as being a good starting point if you want to sell reasonably quickly. This leaves out cases like Dean's RCR, where you'd be leaving (I assume) a lot of money on the table.
So Dean what set it apart? A lot of people saw it on the track and new that it performed well and new you and the quality of your work? I remember you and it were in some really good suspension setup articles in one of the kit car mags. I wonder if that had an effect. If so that suggests a "strategy" for selling a track car.
A.) For the sake of point expansion, what if someone paid a "professional" to build their car. Would one then completely derogate that expenditure when determining a selling price?
B.) If I build the car, would it be considered of "less value" in comparison to the person mentioned above? This is of course assuming that our build qualities are analogous.
:shrug:
The discussion of parts cost and labor as a factor in determining price is possibly misguided. For example, no one cares how much cost McLaren has in their new street car- buyers compare it to prices of what are thought to be comparable cars in terms of style, performance, reputation, exclusivity, etc.
Cost is a factor when setting prices for a product that is duplicated and sold repeatedly, of course, but when it is a car, especially a used car that is firmly in the toy category, the calculus changes for the buyer, and original costs become an article of mild interest but not a factor in determining how much the car is really worth to that person at that time. The tangibles and intangibles are what drive pricing for this kind of product, IMO.
Do you have the only one now available of something rare and desirable? For the right buyer, there might be an intersection of his desire to buy and yours to sell. But cost is almost never a factor in these decisions.
One more example: Does anyone think that the buyer of an original Cobra cares that the car originally cost around $6500? Or that someone just painted it? The things that determine value for this kind of car typically just don't involve costs.
It's all about perceived value.
Cost is a factor when setting prices for a product that is duplicated and sold repeatedly, of course, but when it is a car, especially a used car that is firmly in the toy category, the calculus changes for the buyer, and original costs become an article of mild interest but not a factor in determining how much the car is really worth to that person at that time. The tangibles and intangibles are what drive pricing for this kind of product, IMO.
Do you have the only one now available of something rare and desirable? For the right buyer, there might be an intersection of his desire to buy and yours to sell. But cost is almost never a factor in these decisions.
One more example: Does anyone think that the buyer of an original Cobra cares that the car originally cost around $6500? Or that someone just painted it? The things that determine value for this kind of car typically just don't involve costs.
It's all about perceived value.
Seymour Snerd
Lifetime Supporter
Maybe the inclusion of "parts" in the phrase "parts cost" is distracting. The reason I think parts cost is important is because if you have that amount of money and the ability to build, or that amount of money plus the cost to have a professional assemble it for you, that is what it costs to get a brand new one. So in that sense "parts cost" competes with the car you are trying to sell. To go back to the McLaren, if you're going to sell your McLaren it matters a lot what the factory charges for a new one at the time you want to sell. IOW, all I'm saying is that "parts cost" or "parts and assembly cost" are proxiess for "cost of a new car".
Now that all changes under at least the following circumstances: the kit is no longer available, or there is a long wait time. But aside from that, when I think about buying somebody else's kit the fist question I ask myself is "why not buy and build the kit myself, and how much would that cost?"
What separates an SLC from an original Cobra is that an original SLC is available right now at a fixed price. So in pricing one I don't think you get to add much for "mystique".
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Seymour Snerd
Lifetime Supporter
I really don't know, but suspect it depends entirely on the "professional's" reputation. Apologize for bringing up TKminus again, but I'm pretty sure the word "Olthoff" significantly increases the plausible asking price for an SPF. Similarly, I think an SLC built by Fran could successfully be priced higher than one built by one of us (everything else being equal, of course). Well, one exception: Alex's, because everyone's been waiting so long it will be a notable event when it is first seen running. People value thing's they have to wait for....:lipsrsealed:
By the way, back to the subject of Dean's high-selling RCR GT40 track car, I was trying to think of a way to get that effect with a street car. The only thing I could think of would be to get the car as much exposure as possible: take it to every show, try to get trophies, try to get it talked about, written about, road tested by some magazine or blogger, whatever. The more people go "oh yeah, that's Zoey's car; I saw it at the XYZ show last month" the more people will pay because in some even superficial way it's "known" (again everything else being equal).
Just don't let them see you flat-bedding home from the show trailing coolant. :laugh:
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Yes - McLaren have economies of scale (at least more than a component car manufacturer), a factory warranty, crash testing, arduous reliability testing and decades of racing pedigree. Customers understand the high development costs and the benefits that the design and testing provide.
You didn't imply this, but I don't see typical McLaren buyers considering an SLC. The McLaren requires predominately a money commit (and no knowledge), whereas the SLC is more a time commitment - secondhand component car buyers appreciate that they will likely have to debug issues with the car
For component cars, however well designed and built, the same level of system testing has not been done, nor is there typically a warranty. The people looking to buy these (in my experience) have the skills to appreciate good builds, but probably not the time / patience / equipment to do it themselves. There are serial builders who enjoy the assembly more than the finished car (at least, that's what I've noticed in the UK), or people having other issues (divorce, job loss, health), so will sell at or below cost.
I think that the key factor is that buyers of component cars could build it themselves, choosing the exact parts that they want. They therefore don't put much value on the labour required to build the car, especially as people (including me ..) tend to underestimate how long things take.
So I was down at Fisherman's Wharf in Monterey yesterday getting ready to launch the boat to head out and slay some tuna when I literally looked over and this small car under a car cover caught my eye.
The security guard would not lift the car cover for me, but I knew what it was.
Later, after we pulled in 24 monsters, and put the boat back on the trailer, I walked over to where I saw the "mystery" car. The car was still quarantined behind a fence but there were several employees about and I asked one of them if he could pull the cover off the Supelite-Coupe and he looked at me kind of strangely and with a bit of shock. Maybe he was surprised that I even knew what was under the cover or the fact that I was covered in fish blood and guts and smelled like a can of tuna. Perhaps it was both. Regardless of my appearance and smell, he eagerly pulled the cover off to show what was under there. It was dark and at a distance, but the car still drew a fence-clinging crowd in less than a minute.
I'll be back down on Saturday to enjoy the Historics and check out the car properly this time.
The security guard would not lift the car cover for me, but I knew what it was.
Later, after we pulled in 24 monsters, and put the boat back on the trailer, I walked over to where I saw the "mystery" car. The car was still quarantined behind a fence but there were several employees about and I asked one of them if he could pull the cover off the Supelite-Coupe and he looked at me kind of strangely and with a bit of shock. Maybe he was surprised that I even knew what was under the cover or the fact that I was covered in fish blood and guts and smelled like a can of tuna. Perhaps it was both. Regardless of my appearance and smell, he eagerly pulled the cover off to show what was under there. It was dark and at a distance, but the car still drew a fence-clinging crowd in less than a minute.
I'll be back down on Saturday to enjoy the Historics and check out the car properly this time.
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You have to consider that not all people want to build a car or have the capability to build a car. If you have a buyer that wants a SL-C and is not that mechanically inclined then that person will be very limited to the availability of a car for sale. The pricing for this car used is not based on your average $15 per hour guy. They dream of owning one but will not get the money to pay cash for the car. If you find a guy that is into collecting cars of all types, he will have the money to pay what the value for the car should be, supply and demand. At that point he will not just consider the car as a kit car, but as a finished car and this is how much it will cost. Compared to other cars in that price range can he find what he wants in a SL-C. you can get really used high end sports cars in the $75,000 range but is it the performance and looks of the SL-C, no. Most people will buy the car because that is the car they want not buy the car because it is priced right. So when people go out to buy a SL-C thats what they want, then it comes down to availability, what is on the market and the price comparison between the cars and the quality of the build and the parts put into it. I think once we start seeing that starting to happen the pricing will start to develop for the cars, until this happens it is just talk and projections. When I bought my car there were none available except a new kit, which I did not have the time to put into a complete build. I decided to buy one built and then work on it from there. Not everyone is going to want to build there car from scratch, those are the guys that will set the purchase price for what the car is worth, what is perceived as the value of the car. Again it is finding the right buyer.
Is this Russo and Steele Monterey auction going to be televised tonight? It is available online.
Care to post a link, Al?
I think it would be interesting to watch it go down.
Doug
Nope - it was never in production. They were asked to yank it before they had finished re-engineering it.
Ian
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