Bonhams, RM, Mecum, Gooding and Russo & Steele. What do these names all have in common? For four days in mid-August these five auction companies will draw some of the rarest and most elite collector cars on the planet to a small piece of land that juts out into the Pacific Ocean known as the Monterey Peninsula.

Last year, despite a gloomy financial atmosphere, these five auction companies sold over $120 million worth of collector cars, many selling at or near record prices. But one must dig a little deeper before concluding that the values of all collector cars are on the rise. For the first time that I can recall, many cars sold below the auction companies “low estimate.”

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What is it that differentiated the successes from the failures? In three words the answer is: rarity, provenance and condition. These same principal apply whether we’re talking about a 1962 Ferrari 250GT SWB California Spider (2953cc engine with 3 Weber carburetors producing 280 HP) at over $5 million or a 1962 Ford Galaxie convertible (6665cc engine with 3 Holley carburetors producing 405 HP) at a mere $50,000.

The dreary economic picture has brought cars of all genres and prices to market, dramatically increasing the supply, while demand has decreased, and we all know what happens when supply increases and demand decreases. But all is not gloom and doom. If you have an exceptional car of virtually any type (the rarer the better), with lots of documentation and a “no excuses” history, that is in excellent (preferably original) condition, it’s likely that you car will have increased in value right through the recession. Sophisticated buyers are seeking out these cars and they’re not afraid to open their wallets. They’re smart enough to know that while their 401Ks have become 201Ks, the values of their collector cars have continued to rise.

For those whose collector cars are a bit more average, and not well documented, expect prices to have come off over the past two years. But your loss may be another’s gain. There have been many people sitting on the sidelines, who up until now couldn’t afford to get into this hobby. Before you disparage them for buying your collector car at what you consider a bargain price, remember this. If they were not willing and able to buy your car, its value would be even lower than it already is.

It should be interesting to see what happens at Monterey on August 12th – 15th. The results of these upcoming sales may or may not set the prices for the immediate future, but they will set the mood for buyers and sellers alike.