the Revenant

The 1967 L89 – Investment Opportunity Is Knocking

By Rick Tavel© January 24^th, 2014

 

1967 Corvette L89  Only 16 L89's were produced  (Lot S225.1 2014  Kissimmee Photo: Mecum)

One of the rarest of Corvettes is scheduled to cross Mecum’s block late Saturday afternoon, January 25th, in Kissimmee.  No, it’s not the “Real McCoy”, the 1956 SR Prototype, the Corvette credited with saving the brand from extinction shortly after the model’s introduction.   And it isn’t the three second generation Z06 “tankers”, or the three third generation L88’s, or the gaggle of fourth generation Grand Sports, and collection of Callaway Corvettes which are all featured and cross the block on Friday and Saturday at Mecum’s  3000 car auction extravaganza.  There are over 375 Corvettes being auctioned this year in the “King of Corvettes,” Dana Mecum’s annual collector car Kissimmee auction, the largest collector car auction in the world.  Most of these important Corvettes have been written about and promoted for at least the last few weeks and may bring some mega bucks if they meet the reserves.   As exciting and important as all of these cars are this is not about those cars, the Corvette this article is about is as just as collectible and even more collectible than some of the auction “stars” listed above and it just may be the “sleeper” of the auction since it has gone pretty well unnoticed when it comes to extra marketing and has been overshadowed by those other heavily marketed Corvettes. 

1967 L89 Black on Black (Photo: Mecum)

The Corvette I’m referring to is a 1967 Black on Black convertible with the ultra rare L89 option, lot S225.1* (see Note).  There were only 16 L89 Corvettes produced in 1967 and as such are even rarer than the 1967 Corvette L88 considered to be the  “holy grail,” of which twenty were produced.   Recently, at Barrett-Jackson® a Red on Red, 1967 Corvette L88 coupe set a new world’s record for the highest price paid for a Corvette at auction when it was sold for $3.85M breaking a record set in Dallas by another 1967 L88 five months earlier.  That car sold at $3.52M and broke the then existing record by over a $1M. 

 

I am not saying that the 1967 L89 is as valuable as a 1967 L88 but considering there were fewer L89s produced and in the performance hierarchy the L89 was just under the vaunted L88.  The L89 was rated at 435HP, the same as the L71 engine but due to the weight savings of the all aluminum heads it actually produced over 450HP.  It is generally accepted that the 1967 L89 Corvette was considered to be the ultimate road going American car in its day and apparently Ed Cole, the General Manager of Chevrolet, agreed.  He was asked by his neighbor to order the “ultimate” Corvette and the model Cole ordered him was a Goodwood Green L89 with 4 speed and saddle interior.  Today the car is known as the “Ed Cole Car” since he considered it to be the “ultimate” Corvette, not a bad endorsement.

1967 L89 and known as "The Ed Cole Car"  (Photo: Mecum)

 Certainly Ed Cole knows more than most about automobiles.  Not only was he the General Manager of Chevrolet but he was formerly Chevrolet’s Chief Engineer and responsible for setting the course for the Corvette to become a dominant performance car.  Cole not only allowed Zora the latitude to turn the Corvette into the dominant American performance car but he encouraged it.  And remember it was under Ed Cole's leadership that the legendary small block and big block engine was developed, so Ed Cole thoroughly knew engines.  So when Cole chose the L89 as the ultimate Corvette, it means something. 

 But, just like Ed Cole, every Corvette enthusiast has their own individual idea of the ultimate Corvette.  If you were going racing back in the sixties you probably would want the L88 or the Z06.  If you wanted a car that could be driven almost daily, could be raced on weekends and could shut down almost all other cars in stoplight battles it would probably be the potent 1967 L89.

1963 Corvette Z06 "Tanker"  Black Interior (Lot S172 Kissimmee 2014 Photo: Mecum)

So, aside from not being marketed to the same degree, what else bears consideration? Collectability would be a good place to start.  Among all production second generation models the L89 is among the top three collector Corvettes.  The other two are the "Crown Jewel" of American collector cars, the 1967 L88 followed by the 1963 Z06, particularly those with documented racing heritage.  The L88 and the Z06 have become the most sought after Corvettes and contrary to most collector Corvettes their prices have skyrocketed well beyond their historic values while most others have remained flat or even declined from their historic highs.  The estimated value of both the L88 and Z06 is well above their value seven years ago, prior to the market crash, while most other Corvettes are just now getting back to those prices.  But for some unknown reason the 1967 L89 estimated value is still below the 2006 level, well below. 

Let’s look at some numbers according to the acknowledged classic car valuation authority, Hagerty®, which will illustrate the investment potential of the 1967 L89. The Hagerty® Valuation system is based on actual sales of almost every collector car sold and gives an accurate depiction of historic values.  From this projections and trends and values can be accurately made.  This system is available to everyone free of charge at their website, www.hagerty.com .

 According to the Hagerty tools, the December 2006 value for the 1967 Corvette L88, similar to the one just sold for $3.85M, indicates a number 1 condition 1967 L88 was valued at $1.5M and in December 2013 it was valued at $2.45M.  Even though the December 2013 estimated value of $2.45M was 55% below the January L88 actual sales price , it was more than 60% above its 2006 pre-market -crash value of $1.5M.

1963 Z06 originally raced by Dick Lang (Lot S148 Kissimmee 2014 Photo: Mecum)

Looking at a number 2 condition Z06 shows the value of both the big tank and small tank models in December 2006 valued at $213K and this past December the "tanker" was valued at $270K, a 26% improvement over the 2006 values.  The normal tank Z06 was valued at the same 2005 price and $222 at the end of 2013.  The 21% difference between the small and big tank cars is due to the added value the increased interest in racing heritage adds to the value of a car.  There have been no recent sales of Z06’s but Mecum® has three number 1 condition cars that will be auctioned the same day as the L89.  Though the Hagerty value scale estimates the value of a number 1 "tanker" at $375K Mecum is more optimistic.  Two number 1 condition, silver big tanks, lots S150.1 and S172, are estimated between $600K and $800K  and lot S148 Terry Michaelis’ concours Lang race car, is expected to sell between $900K and $1.2M, well above the $375K estimate for a #1 condition Z06. 

1963 Z06 "Tanker"  Red Interior(Lot S150.1 Kissimmee 2014 Photo: Mecum)

Sales on the L89 are not nearly as strong as the recent trends of the L88 and Z06.   In December 2006 the Hagerty® Valuation Chart shows a number 2 condition L89 convertible to be valued at $465K and the December 2013 value at $331K, almost 30% below the price seven years ago and even below the value during the spring and summer following the 2008 market crash.  A number 1 condition car is valued at $390K, over $100K below the 2006 level.  The percentage drop is well below Corvettes that are not nearly as rare as other second generation Corvettes.  Most of those models have recent values estimated very close to their values seven years ago.  If the Barrett – Jackson auction is any indicator most number one and two condition big block Corvettes are back or above the 2006 values.

Goodwood Green 1967 L89 Ed Cole's Ultimate Corvette  (Photo: Mecum)

Arguably, during the last seven years, no other second generation collectable Corvette has had cars hammered down so far below the estimated value as the rare L89.  It is an aberration, and inexplicable.  At Mecum’s 2011 Indy auction a 1967 L89 was sold at the unbelievable price of $117K, less than half the value of even a number 4 condition car.  At that price the car should have been towed across the block in several pieces.  In 2002 Barrett Jackson® sold a beautiful number 1- condition silver pearl L89 for $221.4K.  But the most blatant example is the sale of the aforementioned “Ed Cole Car”.  The car was originally taken to the Mecum’s Bloomington Gold auction in May of 2009, less than a year after the stock market crash in the fall of 2008, where it failed to meet the $1M reserve being bid to $550K.  Two months later it was taken to Mecum’s Monterey auction with the same $1M reserve and it was bid to only $207K and incredibly the seller lifted the reserve and it sold.  

 So based on the rarity, the price history, and the recent “hot” Corvette market if the L89 prices continue to hammer down based on their recent illogical trend, it would be a good investment because collectors will soon wake up and recognize the opportunity.  Taking all collector requirement into consideration the L89 checks all the boxes.  Granted it will never be as valuable as the “crown jewel” L88, but if you like playing with your Corvette, it’s a helluva lot more “driver friendly”.   And the legendary Z06 may be more desirable based on its history and reputation, especially those with a racing heritage, however the rarity of the L89 should  more than offset the value of a Z06 without a documented racing heritage.   Keep your eyes on the Z06's in Mecum's Saturday auction, they get auctioned before the L89 and if they actually meet their reserves, the bids should offer some perspective as to the value of the L89.  Then grab your checkbook so when Lot S225.1 comes to the block if the opportunity presents itself, you will be ready to take home what could very well be the best investment of the auction. 

 

 

*Important Note:  Like any ultra rare collector car it is important to insure that the car is what it is claimed to be because there are several cars sold every day which are simply not authentic.  Caveat Emptor, buyer beware! Most headline cars being featured by reputable auctions, in fact most cars are as claimed but a buyer should always have a potential purchased checked by a reputable authority who can verify authenticity.  It is important to know that I have not been able to get to Mecum’s Kissimmee auction this year so I have not personally inspected the cars and the cars and condition of the Mecum® cars referenced in this article are taken from the auction catalog and assumed to be as the seller describes.  I have personally inspected the Dick Lang Z06 and one of the silver Z06’s earlier this year and can vouch for their authenticity and outstanding condition.  The two cars I inspected are truly Blue Chip award winning cars.  However I have not inspected the third Z06 or the L89.  Nevertheless the projected values of the examples should not be affected for that model in the stated condition.