3 January 2014

Is the classic car market due for a correction in 2014?

The Hagerty Price Guide recently published values from Book 23 and, in some respects, the song remains the same. Top-tier indices like our Blue Chip Index and Ferrari Index accelerated for the fourth consecutive period. Our postwar German Index was even more stunning, doubling up on last period’s 16% clip by posting gains of 32%. The German Index improved by 81% during 2013. For the most desirable cars, the market has rarely been stronger.

This continued growth of the market is bringing with it attention from far and wide. Each successive major public auction seems to set a new record of one stripe or another, and even circles outside of the car world are marveling at the numbers ($27.5M for a Ferrari! $3M for a Corvette!). With this increased attention (and possible participation of inexperienced buyers), there is a sizeable opinion among market observers that the current pace is set for a course correction this year. How big a correction is hotly debated with viewpoints ranging from “relaxing growth” to “pop!” Few pundits, on the other hand, are indicating that these cars will leap farther forward than they did in 2013. For what it’s worth, we believe that prices will continue to grow, but at a slower pace than what was recorded this past year. Furthermore, we feel this is a good thing.

For the cars that most collectors drive and own, the cars that are most popularly traded, slow and steady is the pace. Hagerty’s British Car Index was the biggest mover outside of the three major indices we have already mentioned, and it increased by 5%. Otherwise, American Muscle, 1950s American, and Affordable Classics all stood pat or inched up a point. Turns out that there are still plenty of great cars available at affordable prices, or at least at prices that aren’t head and shoulders above where they were five years ago, and these cars have shown to be relatively “safe” places to spend some money.

January is held up as the bellwether for the collector car market, with Scottsdale and now Kissimmee sales setting the tone for what will follow. Whether this is true or not, the clues will start to be cast in just a few days, and then the market will feverishly begin to make sense of them.

35 Reader Comments

  • 1
    Peter ny January 4, 2014 at 15:03
    WHat is the average value for a 1974 Jensen two seater?
  • 2
    Chuck Carolinas January 9, 2014 at 14:49
    As an investment - a collector car has been more stable than the dollar with the addeded bene of a weekend drive.
  • 3
    Route 66 PubCo Tempe, AZ January 9, 2014 at 14:55
    No corrections yet. If anything more silly money will be spent as folks cash out from the stock market rise.
  • 4
    Sunset Classics Minnesota, USA January 9, 2014 at 15:35
    That line graph could sure use some color or other clarification. I can't even find the German Car line. Confusing.
  • 5
    Richard New Jersey January 9, 2014 at 16:03
    For some time now I have been saying the people at these auctions who are driving up these prices Have more money than brains. And I believe it's true. I have lived thru 3 boom & bust cycles and this one is no different. Also the current government is eyeing this market of collector cars just licking their chops, Just wait and see if I'm correct......
  • 6
    Pete cincinnati January 9, 2014 at 16:29
    what is the value of a 1970 Chrysler 300H in daily driver shape...
  • 7
    Chuck Mystic Conn January 9, 2014 at 16:46
    Hagerty: Great graph, one improvement would be color lines, it's difficult to differentiate which is which, but none the less it seems like I should have bought the Ferrari or Bugatti a few years ago rather than the MGB. But, I bet the guy with the Ferrari doesn't take it to the beach all summer long, top down, with a surfboard mashed against the dashboard, The pooch in the passenger seat, wet towels and sand on the floor and seats slick with suntan oil. Doesn't get much better than that the way I see it. As Visa used to say those experiences are priceless. Chuck
  • 8
    Kirk ct January 9, 2014 at 16:46
    Whatever the tow cost is to bring it to a British mechanic.
  • 9
    Arthur Massachusetts January 9, 2014 at 16:57
    I'd appreciate some marketing advice about the best way to market my absolutely MINT 1979 VW convertible. The car has never been used for anything but the rare summer drive. I've had since new. It has 1800 miles and is all original (not so much as a chip). The museum quality has me stumped as to the best places to advertise etc. I've sold plenty of cars before but never one as unique as this.
  • 10
    Jerry DFW January 9, 2014 at 17:21
    Personally, I hope all the non-Car Guys lose their collective butts!!! IN MY OPINION; Cars like Muscle Cars, Early 911's & 356's, 59 El Dorados, and such are made to be owned, driven and enjoyed by the guys and gals that appreciate the Car for what it is. And for those that only are in it for the Profits, I hope you lose your Tail as you have screwed it up for the 'real' Car guys that actually work with their hands finding and rebuilding the rolling pieces of art!!! Some of us do NOT like the Jelly-beans of today!
  • 11
    Don McKay Forney January 9, 2014 at 17:33
    What is the value of a 1955 Ford Pickup in top condition, painted white with red trim; red upholstery, JBL sound system, 350 trans, 302 motor, Heidts Super Ride Conversion Kit; Power brakes, Cross member with power rack and winner in its class at the 5th Annual Auto Show-Forney's Turkey Trax.
  • 12
    John Lansing, MI January 9, 2014 at 18:21
    A bubble could be reality for the auction crowd that flip cars for money. I have always marveled at the disconnect between what goes on in the big national auctions like Mecum and Barrett- Jackson and what cars actually sell for on main street with regular hobbyists.
  • 13
    michael ferrell United States January 9, 2014 at 18:55
    i think my 1956 ford fairlane would be worth about $25,000 to $30,000 with less than 40000 miles and hagerty has it worth only worth $17,500 so i think you are behind.
  • 14
    Sherman Walnut Creek CA January 9, 2014 at 19:09
    Peter, a Jensen doesn't bring much but it still beats a 1950's Nash, if that matters?
  • 15
    Ron WNY January 9, 2014 at 19:42
    Slow and steady is right where I like to be with Muscle and other American Classics. I'm thinking we're past the worst of the recession, unemployment is shrinking, and many business sectors are past the slide and growing. If that proves to last, the collector car market will do well along with all else.
  • 16
    Dave Virginia January 9, 2014 at 20:02
    I watched ferraris do this in the late eighties. Look out below. The good stuff stays and the others fall like a rock. If you have an oldie that isn't quite a goodie, sell, sell, sell!
  • 17
    Rollie Demay ny January 9, 2014 at 20:10
    While prices seem to be going up endlessly, the future is already set. Young people today simply do not have the fervor for cars of their parents and grandparents. In addition, most autos today lack the aura of the classics and muscle cars. The enthusiast era is rapidly coming to an end. Soon it will be over.
  • 18
    Maserati SD Poway, CA January 9, 2014 at 21:35
    Look at the stock market since Sept 2006, I'd say the car market is doing just fine. Note that those who lost 50% of their stock value in 2008/2009 had nothing but paper, todays car collector can always go out for a drive.
  • 19
    BerkshireBear United States January 9, 2014 at 22:50
    How about republishing the chart with color or something other than micro-patterns to distinguish the lines?
  • 20
    DIANE IL January 9, 2014 at 23:19
  • 21
    Jerry Colorado January 10, 2014 at 13:03
    Your chart even when enlarged is impossible to decipher. Why not use different colors for the categories?
  • 22
    Terry Van Eck IL January 10, 2014 at 14:29
    I think that the recent increase in prices is hurting the old car hobby. the average middle class person who would like to get in the hobby will be unable to afford a car he or she is interested in, and the younger guys and girls will be disinterested because of cost. as it is even now some prices of meager parts cars are out of reach,all caused by high prices of cars purchased by investors and not real car people.
  • 23
    Doug CA January 10, 2014 at 15:59
    Hey Peter, here's Hagerty's Valuation site, just enter yr,make,model and it will give you some good info: http://www.hagerty.com/valuationtools
  • 24
    Ted Southern California January 10, 2014 at 16:28
    @Peter: Peter, you need to use the Hagerty valuation tool. Just go up to the top of this page, click "Valuation" then "Value My Car." I use this tool all the time and it seems to give very accurate results. As to the potential correction in car values, I'm not sure it will happen. Every year that goes by, more old collector cars are lost by accident, neglect, etc. This only makes them rarer. At the same time, the rich keep getting richer! The combination of these two would seem to me to ensure that the price of true collectibles will continue to rise.
  • 25
    Michael Delaware January 10, 2014 at 19:06
    I wonder how much these T.V. show effect the market. They give the impression that anyone can flip a older car for big profit. We all should know that is not true. What I see is the shows makes it hard to buy a cool father and son project car. Personally I feel this will undermine the future car guy/gal
  • 26
    John OH January 10, 2014 at 07:54
    I am sure I am paraphrasing, but the quote that comes to mind is "the Emperor has no clothes" in a tale by Hans Christian Andersen. All markets go through bubbles and the resulting corrections. Collector cars are no different. It's just that no one has the guts to admit that no car is worth 20 million or even 2 million dollars, but we have seen corrections in the collector car market before and we will see one again. It is a good time to sell.
  • 27
    Phil VA January 10, 2014 at 08:47
    Due to the economy, and the flood of rust-oration vehicles the prices of most non concourse vehicles needs to come down out of the rafters if we collector/restorers are to survive. A muscle era vehicle that brought $40-$50k ten years ago is realistically only worth half that now.
  • 28
    Carl Beck Clearwater, FL January 10, 2014 at 21:41
    People with magi millions or even Billions are simply buying hard assets to guard against the coming inflation. Said another way, to guard against the ever declining purchasing power of the U.S. Dollar. I recall that in the late 80's to early 90's the 300SL Gullwings were selling for $1M+.. Then when the bubble burst - they were down to less than $200K… Now back up to $1M+. Adjusted for Inflation that $1M today is only equal to $560,778.14 in 1990 Dollars.. So the 300SL's are still half as much as they were in 1990 in real dollars.
  • 29
    Joe Santana Portland, OR January 10, 2014 at 09:59
    Even when you scale up that graph larger than large, it's VERY difficult to read. It's hard to discern which line matches the legend best. You shouldn't need a magnifying glass to read a graph. A color legend is recommended for next time if the idea is to communicate information.
  • 30
    Vette' Woman WI January 17, 2014 at 15:52
    Chuck is right, collectors are an investment you can enjoy. You couldn't give me a diamond large enough to replace the joy of driving and caring for my 85' Vette.
  • 31
    Ed fallston, Maryland January 18, 2014 at 09:26
    Chart Sucks! Dots and Dashes and whatever else you have going on there do not do well when pixilated. Pixilation rendered your chart fairly useless. Go back and re-do it and re-issue it.
  • 32
    Tommy AZ January 19, 2014 at 12:10
    It would be nice if the Auction games were exposed. The jacking up of prices on the block long after the real bidding stopped. Also the phony sales from the insiders. Just like reality TV, they have to put on a good show for ratings and advertisers. Being that none of the Publications want to get kicked out of the Auctions, that end will never be exposed. So Joe at home thinks his car is worth what he saw one go up to in $$$ on TV, but forgets that in reality the car did not sell, or as they say the bid goes on.
  • 33
    Dennis Sterling Heights MI June 23, 2014 at 19:42
    The end of the 50s classic car collecting is coming to a close, the 60s will be next in 10-15 years, they will not be worthless but people collect what they new as a young person. There will be a few gen xers who will still love 60s classic muscle, and very few millenials.
  • 34
    Michael Chicago June 30, 2014 at 00:22
    I don't have a crystal ball, so I can't say when the bubble will burst. But my best guess is the market will turn down sharply within ten years as the Baby Boomers sell off their cars to fund their retirement. I see listings already, regarding owners getting too old to drive, or their kids have no interest. Who is going to buy all these cars at their current values? Yes, someone will always be interested in them. There is a finite supply, and a growing population. But the interest is waning amongst Millennials for complicated old cars. The rarest ones will always be coveted in Europe and here. But your average Chevy or Ford will struggle. The current young driver is in a much worse off position than Boomers were forty years ago. Higher costs of living and lower wages, high student loan debt, inability to buy a house, movement towards urban centers, etc. The current market doesn't stand a chance
  • 35
    Bill Leake Colorado July 30, 2014 at 09:41
    Good, first class article but a second class graph. No color, really?

Join the Discussion