Think twice before you invest in a classic car, says the man who bought a Bugatti for more than $30 million.
California-based Peter Mullin, 71, sits in the driver’s seat of his 1936 Type 57SC Atlantic and admires its gray-blue bodywork. The streamlined luxury coupe, bought in 2010, is the world’s most expensive auto.
“Non-car people shouldn’t buy thinking this a good place to park their money,” he says. “The odds of choosing the wrong thing or a fake are real high. You should buy a car because you love it. If you’ve bought something good and they didn’t make 30,000 of them, it probably will go up in value. But that’s not a good enough reason in itself for the purchase.”
Prices for the rarest classic cars have risen thanks to demand from collectors such as Mullin. The Historic Automobile Group International (HAGI) benchmark index of exceptional cars had compound annual growth of 12.5 percent from 1980 to 2011. New investors are looking to four-wheeled rarities as an alternative to volatile financial markets. They often sell for more through discreet private transactions than at public auctions. Mediocre models remain unsold or achieve lower numbers, HAGI said in its latest monthly report.
Mullin is the founder of a Los Angeles-based company that provides executive benefits packages. Mullin TBG was acquired by Prudential Financial Inc. for an undisclosed price in 2008.
“It’s the Mona Lisa of cars,” Mullin says of his pride-and-joy Bugatti. Like the Leonardo da Vinci portrait, on show a few Paris subway stops away, the car attracts crowds of camera-snapping admirers. Mullin has a passion for French mid-20th-century marques.
“French cars of the late 20s and 30s were the absolute apex,” says Mullin, who owns more than 65 of them. “In terms of their combination of engineering, performance and sculptural beauty, I don’t think anything’s come close.”
It was the first time his collection, devoted to cars such as Bugatti, Delahaye, Delage and Hispano-Suiza, was shown in Europe. Mullin was paying respects to the country that created these visionary “rolling sculptures,” as he calls them.
Mullin, casually dressed in a check shirt and blue v-neck sweater, is congratulated by a fellow U.S. collector on winning his first Best of Show at the Pebble Beach “Concours d’Elegance” in August last year.
“Thanks!” beams Mullin. “Been there 27 straight years with different cars. First one!”
The winning entry is parked a few feet away. The 1934 Voisin Type C25 Aerodyne is one five examples that survive. There’s only one other Bugatti Atlantic in original condition, and it’s owned by Ralph Lauren.
Mullin is reluctant to disclose the exact price he paid. The futuristic 140-mph creation of Ettore Bugatti’s son Jean, made out of welded aluminum with a central seam, was bought privately from the family of U.S. car collector Peter D. Williamson, a neurologist who died in 2008.
“When I bought that car, I realized a lifetime dream,” he says. The California-based classic-car auction company Gooding & Co., who brokered the transaction, gave out an official sale price of $30 million to $40 million. Mullin declines to confirm figures of $34 million to $36 million quoted by dealers.
Is there any other car that could rival its price?
“The Ferrari 250 GTO would be the only one in that league,” Mullin says. “They’ve sold for more than $20 million.”
A total of 39 GTOs in all were produced from 1962 to 1964 and prices are rising. In January, a 1963 example numbered 5095 was sold by the U.K.-based businessman Jon Hunt, the former chief executive of the Foxtons real-estate group, for about $32 million, said dealers with knowledge of the matter.
Hunt declined to comment, said Anthony Carlisle, who handles Hunt’s media relations, in an e-mail.
Mullin still keeps an investor’s eye out for models that he regards as relatively neglected or undervalued.
“There aren’t really any sleepers out there,” he says. “I do think some of the Jaguar XK120s and the Porsche speedsters are a little undervalued. So too are pre-war and just-postwar Citroens. The Traction Avant was a fantastic car.”
Mullin also points out the dangers of restoration. It’s easy to spend $300,000 on a car and then discover that it would have been worth more in original condition, he says.
“The Europeans have understood this for much longer than the Americans,” he says. “They’re in love with originality.”
Mullin has taken the cult of originality to its logical extreme with his display in California of the wrecked 1925 Bugatti Brescia Type-22 that he bought for 260,500 euros ($368,320) at Bonhams in Paris in January, 2010. The car had spent more than 70 years at the bottom of Lake Maggiore.
“We’re leaving it as is,” Mullin says proudly. “It’s not a car any more. It’s more a work of art.” A bit like the Mona Lisa, really -- though in slightly worse condition.
(Scott Reyburn writes about the art market for Muse, the arts and culture section of Bloomberg News. Opinions expressed are his own.)
To contact the writer on the story: Scott Reyburn in Paris at firstname.lastname@example.org.
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