2014 Classic Car Prices: Flat Since the Recession
The guys at Hemmings Motor News published a list of five classic car predictions on the Hemmings Blog a few days ago, and they suggested that "auction prices for high end cars will continue to climb." If you're looking at nothing other than the price of what some rich dude will pay for a '67 Ferrari 275 GTB/4 under the hot television lights of January 19th's Barrett-Jackson Saturday night auction, they have a point. But that's hardly the barometer for what ordinary folks will pay for a vintage car on the open market. In that arena – where most people are selling and buying – it's a lot harder to sell a car for big money, and prices have never recovered after the recession. Using Barrett-Jackson – or any other auction for that matter – as the measure of what a car is worth just doesn't work. There are too many people hanging around those places that buy cars on a whim that completely skew the curve. Here's an example: In 2006, I was at the Christie's auction at the Jet Center in Monterey, California. Lot #1 that day was a 1966 Vespa 150. It was a pretty neat little bike, just like the one in my garage, and I recognized all the restoration parts from the same Scooterworks catalog from which I ordered all my parts.
On the open market, that scooter might have been worth $4,000. It's the ultimate run-of-the-mill Vespa, with hundreds of thousands of examples from all over the world. That bike sold for $17,000. SEVENTEEN. GRAND. That was $5,000 more than Christie's ludicrous auction estimate, and $7,000 more than what Jerry Seinfeld paid for a Vespa GS at the peak of the dot-com era, a bike that's actually rare and worth something.
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What happened? Some guy with more money than sense decided he was going to impress his rich buddies and make it rain the way the rest of us throw dollar bills at a strip club.
What impact did it have on what the rest of us will pay for a Vespa 150? Nothing. The very next day, ones just as nice as that were selling for $3,500.
The hardcore collector market doesn't give a rat's ass whether some dope lays out $13k for a 1983 Chrysler Town & Country at Auctions America, which happened late last year. They're still worth $4,000, all day long.
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Hagerty Insurance provides some excellent resources to help understand what the collector car market is doing. We used Hagerty's Collector Car Portfolio tool to look at specific cars to see where prices are headed for quite a few cars. The graphs here come from that tool.
1960s-era Ferraris seem to be pretty impervious to economic downturns, but you're talking about a handful of hand-built automobiles with a worldwide legacy. What that has to do with the price of the '65 Mustang you're hocking on Craigslist is about the same as what Donald Trump's real estate values have to do with your two-bedroom crackerbox in Detroit.
And Ford prices are flat. They have been for a long time now. Model As – which were the LS6 Chevelles of the 1980s – are now languishing for significantly less than what it would cost to restore one. A quick search of Hemmings Classifieds reveals 235 Model As with prices as low as $17,500 for a handsome Model A pickup.
The 1965 Buick Riviera, which you'd have to consider to be one of the most beautiful, desirable cars ever built in the United States, has absolutely tanked since its peak in 2007. If you've ever wanted one, get one now.
Wide swaths of the collector car market are unfazed by the vagaries of the market: Thunderbirds – even the coveted 1955 to 1957 "Baby Birds" – are relatively inexpensive given their rarity. The full-size Thunderbirds are pound-for-pound cheaper than boneless chicken. Same goes for any full-size General Motors car, with the exception of the rarest Cadillacs. Full-size Buicks, Oldsmobiles and Pontiacs are nailed to the floor.
The European market isn't much different. Yes, vintage Lamborghinis continue to be expensive. Yes, the Porsche 356 and early 911 market seems to have yet found its peak. But everything else is flat. If you've ever wanted an MG, prices are exactly the same as they were before the economic downturn in 2008, and given the price of everything else, that's a decline. Triumphs, the more common BMW 2002s, even Jaguars are parked right where they were before the crash. In the Ferrari market, if you've ever wanted a 308, you should probably buy one now, because they've never experienced the bump in value of the more rare 1960s models.
Vintage car dealers, of course, are asking the world for everything in their inventory, but you'd be out of your mind not to seek out a vintage car privately. Every vintage car brand, or sometimes even model, has its own dedicated forum with an active classified section, where the cars of your dreams are offered privately, without the 10 to 30 percent markup of a dealer, or the 10 percent buyer's fee expected by an auction house.
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Hagerty also provides a stock-market-style assessment of the classic car world. Hagerty certainly has a reason to keep an eye on classic car values. It insures more of them than any other company in the country. It also has a vested interest in giving its customers as much data as possible about those values, because Hagerty has "agreed value" policies that allow customers to set the value of their cars themselves, and choose how much they want to insure them for. Hagerty isn't interested in over-insuring anything, since it would have to pay out if there was ever an accident.
Their Market Trends tools are basically an index fund of cars broken out into several categories: Blue Chip (with cars like the Ferrari 275GTB), British Cars (with the 1963 MGB and the E-Type), Ferrari (with all the usual suspects), Muscle Cars (ditto), German Collectibles, 1950s American, and Affordable Classics.
All of the indices show an uptick in value, and it's no surprise that the Blue Chip cars – those handful of very rare cars that almost always trade at auction – saw the biggest leap.
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What's confusing is the upturn in value in the Affordable Classics segment, until you actually take a look at what's in there. Hagerty's Dave Kinney notes "owners of even low-priced cars are seeing values rise." But cars in the index like the Studebaker Avanti, the 1970 Camaro V-8 Coupe, the Triumph TR6, the Datsun 240Z and the Porsche 914 were never particularly "affordable."
Second, it's completely seeded with cars from the 1960s. Out of 13 cars, eight are 1960s models. Those cars have been protected from declines in the market because they're interesting to baby boomers who (A) there are a lot of and (B) have had the most cash, up to this point.
But there are huge gaps in what you'd consider an affordable classic. Not a Pontiac, an Olds or a Mercury on the list. Hagerty doesn't even produce valuation data on Model As, and there's nothing in the Affordable Classics segment from earlier than the one 1949 Buick in there, or later than 1972.
The 1973 Mercury Cougar, for example, is flatlining, with the exception of a minor uptick in "Condition #1" cars, which Hagerty describe as "the best in the world." For the rest of us driving nice #2 and #3 examples, there's been no impact on prices in years.
Even the 1975 Firebird Esprit, which a lot of Gen X folks have an affinity for since watching Jim Rockford hauling one around for years, has experienced little to no gains in years in anything but perfect condition.
And look at cars like the Jaguar XK120. They had an almost unstoppable trajectory prior to the downturn. They're gaining some ground again, but they've never recovered to where they were prior to 2007.
If you'd built that index with a mix of cars from all the eras you'd consider "classic," and from the brands you'd consider "affordable," you'd have a totally different picture.
The best advice we can give if you're interested in owning something older is to stay away from the dealers, turn your television off during the Barrett-Jackson auction, and focus on the cars that are just slightly outside the mainstream from private parties. It's where the bulk of the action is happening, and it's got nothing to do with what the usual suspects in the classic car world are going to try and tell you.
In general, prices nose-dived after the recession, and for the bulk of classic cars out there, they're selling for the same money they were five years ago.