While fellow OCW staffers Ron Kowalke and Meredyth Albright were out in Arizona, covering the Scottsdale-area auctions, I stayed back, manned the phones, answered the e-mails and somehow found time to prepare the latest issue of Old Cars Weekly.

While here, I received periodic updates from Old Cars Weekly asking, “Did you see what this XXX sold for?” and “Can you believe XXX sold for that much?” Through these updates, and following Ron and Meredyth’s return, I was able to piece together a few observations about what cars people are spending their money on.

One of the first calls I received was on a 1980 Pontiac Trans Am Turbo with a 301-cid V-8 that sold for around $70,000, and a 266-mile 1974 Chevrolet Spirit of America Impala two-door hardtop that fetched $30,000. Since the Chevy had such low miles, I’m not surprised by the dollar amount. Low-mileage originals continue to get big bucks, and probably always will, just as it should be. But the T/A is surprising. It’s good to see “later” muscle cars getting these kinds of dollars, but before you start complaining that price guides have your circa-1980 Firebirds undervalued, realize that not EVERY 1980 Firebird is worth this much. These cars (and by “these cars,” I mean 1970s and early 1980s muscle cars) have been undervalued for some time, so we may see the level of attention being paid to these cars escalate as the teenagers who enjoyed them in the 1970s and ‘80s get more disposable income and start shopping for a collector car. If you’ve got one, hang on to it. If you’ve always wanted one, now’s the time to buy.

When it comes to pure muscle cars, and by that, I mean 1960s and early 1970s GTO’s, Super Bees, Challengers and Mustangs, the market has clearly regained its sanity. Half-million-dollar Hemi ‘Cuda coupes are no more, and that’s the way it should be. Bidders were clearly overpaying for these cars at more than half-a-million bucks, and only the brave admitted that in public. (At Barrett-Jackson’s 2006 January sale, a Hemi ‘Cuda fetched $650,000, and two other Hemi ‘Cudas were in $400,000-500,000 territory.) These days, the cars are trading for around the $150,000 mark, and that seems fair. And ignore those panic-inducing journalists just looking to create waves when they cry, “The muscle car market is dead!” It’s not, and they’re morons. Muscle cars possess the universal combination of features collectors of every era look for, and will always look for: performance, beauty and rarity. As long as people are refining dead dinosaurs into fuel, you’ll never be able to buy a Hemi “anything” for $10,000 again. But you probably won’t lose your shirt if you drop your life’s savings of $150,000 or less on a Hemi Challenger.

If you’re an investor, the Arizona auctions did show you something to fear: clone prices are collapsing. I say “Amen.” These cars should NEVER have been worth six figures. Ever. So, put down your torch and leave the original 396-cid V-8 in your Chevelle or 340-cid V-8 in your ‘Cuda, because your Hemi or SS-454 clone will never be worth as much as your car was with its original smaller-displacement muscle car engine. Want proof? How about a $68,000 1970 Hemi Challenger clone at this year’s Barrett-Jackson sale? I thought so. And if you ask me, that’s still at least $28,000 too much. Or, ask Drew Alcazar of Russo & Steele, who noticed the downward trend of clones in early 2007, if not earlier.

Truth be told, clones were already coming down last year. At the January 2007 Barrett-Jackson auction, a 1970 Challenger R/T SE Hemi clone fetched $115,000, showing how much clones were already coming down from the $150,000-plus range.

If muscle cars are down, where’s the money, you ask? Classics with a big “C.” People looking to spend big bucks on old cars must have finally pulled the switch and seen the light bulb turn on. While many people were drinking and bidding on muscle cars, Classics were fetching the same kinds of dollars some muscle cars were getting at the “pre-market correction” peak.

Most knowledgeable car collectors never agreed with the idea that a mass-produced car with a performance engine (think Hemi ‘Cuda) was worth as much as a Classic car, especially those with hand-built bodies from renowned coachbuilders on performance-oriented chassis (think Duesenberg). And while some muscle cars go back to more realistic prices, many Classics have continued to rise in value.

Since I’m a Duesenberg nut, some examples are Duesenberg sedans for around $250,000 to 500,000, depending on body style, coachbuilder and provenance. In 2008, we’re seeing starting prices for sedans in $500,000 territory, and up. Want examples? At Gooding Co.’s January sale in Arizona, $1 million even was paid for a Murphy Clear Vision sedan. At the 2007 Kruse fall sale in Auburn, Ind., a Rollston sedan fetched $875,000 on the block.

Packards are another good example. At the widely attended Otis Chandler sale in Oct. 2006, the money was flying in a fashion that can, at the very least, be called “insane.” There, Chandler’s 1934 Packard Twelve Dietrich coupe sold for $1 million. At RM Auction’s January 2008 sale, one of the few other matching 1934 Twelve Dietrich coupes sold for $1.8 million.

Before you go out and find of the other 1934 Packard Twelve Dietrich coupes of the handful built, stop. Think. Remember, investing in cars is just as risky as investing in the stock market. Perhaps even riskier. My advice is this: buy something you like, and something you can afford. Study values of your car in price guides Old Cars Price Guide, other publications, classified ads, auctions prices, etc., before you write the check. This way, your risk is greatly reduced. And don’t buy a car because it may be worth more in the future, buy it because you want to have fun and meet people.

Many of the people I know with million-dollar cars didn’t buy them because they wanted to make money, they bought the cars because they liked them. And they still do. When it’s time to sell, they’ll make out very, very well. But that’s the furthest thing from their mind. And when you’re behind the wheel of your car, its value should be the furthest thing from yours, too.

J-149, chassis number 2174, a LeBaron phaeton, at the RM Auctions sale in Scottsdale. It fetched $1.7 million. (Meredyth Albright photo)

J-334, chassis number 2302 (with bellhousing J-281), a LaGrande phaeton, at the 2008 Barrett-Jackson sale. It fetched $1 million. (Meredyth Albright photo)