5 August 2015

State of the Market: 'Modern classics' are the hottest market segment ahead of Monterey

August means anticipation in the classic car market. The major auction companies that stage events in and around Monterey, Calif., have all announced their star consignments and are poised to kick off their biggest events of the year. Predictions have begun for how the Monterey auctions will fare this year, and opinions vary but, for our part, we believe the market is continuing to grow, but is doing so at a slower rate. In other words, the arc we have been describing for the past 18 months will persist, which should be reassuring.

There is no denying that the overall market is expanding. The Hagerty Market Rating has moved from 70.39 to 71.50 since the beginning of the year, and continues to reside in the “expanding” range of the measure. Year-to-date auction totals are 15% ahead of last year’s record figure, and the average online dealer listing price is up since January.

Below the surface, though, what is driving the market has changed. Instead of the more predictable million-dollar cars pushing growth, “modern classics” have emerged as the hottest segment of the market. Not to say that ultra-expensive models don’t continue to appreciate. Those cars that provide impeccable provenance, thorough documentation, and immediate enjoyment are inspiring bidding wars. Those cars in this price range that are wanting in some respect, though, languish.

Meanwhile, cars from the 1980s and 1990s constitute some of the biggest movers from the past 12 months, especially those models that possess rarity, performance, and a legitimate link to competition success. The consignments at the Monterey auctions reflect this shift. Compared to 2014, 75% more vehicles from the 1980s have been consigned and there are 23% more consignments from the 1990s. The number of Porsches from the 1980s has tripled. The number of Ferraris from the 1980s has doubled. It is clear the demand is there.

It is very possible that numbers from the 2015 Monterey auctions will come in below last year’s benchmark $428M tally. In fact, we estimate that the final total will land in the $410-415M range. This doesn’t mean the wolf is at the door, however. Remember that 2014 was something of a “once in a generation” moment, where some of the rarest cars on the planet became publically available. It shouldn’t be too great a surprise that the feat wasn’t topped a short year later. While there is nothing on the docket to compare to a Ferrari 250 GTO this year, there is still no shortage of cars that could be a crown jewel of a world-class collection. Furthermore, there are more cars with the potential to exceed the million-dollar mark this year than last, and at a higher average value, too.

In the current market, buyers are increasingly knowledgeable and discerning, and are willing to pay for the best. They aren’t spending irrationally with the expectation that what they acquire today will automatically be worth more tomorrow no matter its history. This fact alone is encouraging, as slower growth will ultimately be more sustainable, but it may take a bit longer for sellers to recognize this. Keep that in mind as the numbers are reported.

14 Reader Comments

  • 1
    Norm san diego August 5, 2015 at 16:05
    I'm 68 years old and grew up in Brooklyn when Pizza was great, Nike was a Missile and cars were magnificently primitive works of art representing ever-increasingly higher performance limited only by the then-current technology. So today, if my father didn't drive it when I was a kid, or if I never had a sexual escapade in it when I was a kid, I have no interest in owning it now-which eliminates cars of the 70's from my circle of interest. Cars up to the early 60's had individual characteristics of mechanical technology, ride quality, suspension geometry, all of which made each brand somewhat unique. Only Buick had Dynaflow (excepting 1953 when the Hydramatic plant burned down), the transmission that did not shift, Chevy had Powerglide and the GM cars had either 3 speed or 4 speed HydraMatics, all of which served to differentiate the driving experience of each brand. After the mid 60's, transmissions and then engines were shared across family brands, which made the cars more appliances than anything else. Cars from the 70's were really unremarkable given the over bloated "corporate" styling, coupled with the newly mandated emissions compliance. Nah, no interest in any of them. But it's fine with me if that's what's popular today. I just don't get it-but then, my favorite cars are IMPERIALS of the 50's and early to mid 60's.
  • 2
    Mister 2 Tim Boca Raton, Fl August 5, 2015 at 18:35
    I gave up racing my Pontiac Fiero GT V6 and bought into a 1989 Mr2 Supercharged Model 26 years ago. The Mr2 SC was a very limited production car and the only supercharged car Toyota ever imported into America. I show the racecar in local shows and cruise-ins in South Florida and I get lots of positive comments. I also have a pristine stock version of the SC in storage. As your article points out perhaps as time goes on these performance and rare cars will slowly become appreciated.
  • 3
    Patrick (pjmk65) Indiana August 5, 2015 at 19:52
    I can see the low mileage original modern classics increasing in value faster than basic 50's and 60's cars (with the exception of iconic or muscle and exotic cars). The survivor rate is lower (rust). The higher cost and the technical problems (parts supply and ever changing technology) of restoration. Those who want one will spend the money on the few good ones left. What I find strange is the constant "throw the baby out with the bathwater" attitude of many people. While most of the late 70's and 80's cars were lackluster. There are some gems that stand out as potential classics and are remembered as special.
  • 4
    Bobby Bluegrass August 5, 2015 at 19:52
    I'm 45 and can't tell most 50's cars apart. I appreciate the style, but onecar with big chrome bumpers and tail fins looks much the same as the others to me. I started driving in the mid eighties and the cars we owned and drove were 70s and 80s cars. 50s and 60s cars were old junk or beyond reach financially for minimum wage 16 year old kids. I rode in some 50s-60s cars and they were much like sitting in a tuna can with wagon wheels. Manual drum brakes, manual steering, no AC and primitive suspension. They didn't stop well and were a bear to drive. At 16 I had a 74 Chevelle that came from the factory with PS,PB,AC TH350 auto and rode like floating on a cloud. It was a good looking car with nice lines and more than enough HP to beat the stuffing out of some of those wheezing, smoky muscle cars. It cost me half of what a rusted out 60s car cost then. No brainer. Lots of guys poo-poo 70s-90s cars. The same guy that complains about big bumpers on a 75 Caddy seems to love the big bumpers on a 58 Caddy. Weird. The guy that complains about "smog motors" is usually sitting next to his car under a tree in a lawn chair, not driving. You don't like the newer cars? Good. Keeps 'em cheap!
  • 5
    Allan Jack Edmonton, Canada August 5, 2015 at 22:35
    Watch the Acura NSX... early models , low miles. This is a car that was way ahead of its time and very difficult to reproduce. The new edition will raise the profile and prices will follow in my opinion.
  • 6
    Michael Rogers Central Coast of California August 6, 2015 at 01:14
    Much of it is inevitable but the hobby of collecting, modifying and driving cars has radically changed to investing preserving and not driving them because they've become too valuable to drive. As a teen, we 'drug the main' along with maybe 25 or 30 other guys every Friday night " to pick up some chicks." I don't remember much of the latter but checking out the other's rides and a few impromptu drag races from stop lite to next. It was all about our 10+ year old cars we had bought from summer job wages at 75 cents an hour. Yes some "daddie's little girl" might be there with a T Bird but she and her friends weren't part of the car community. As a boy, you had to know about your car because you couldn't afford to pay to have it fixed so you learned mechanics, electrics, maybe welding and of course engine swapping etc. Many or most he car people now are 30+ year olds that pay tens to hundreds of thousands for admittedly high performance cars that they must have serviced by specialists because they've not received the specialized training necessary to do their own. TRUE, there are some of us of any age that still are following the hobby but that portion of the population is the minority.
  • 7
    darrin Los Angeles August 6, 2015 at 17:15
    Gary, I inquired about my '95 Twin Turbo 6 spd in the past and was politely dismissed. It was laughable then that it wasn't considered a collectible and even more so now. It's the only car I ever bought that increased in value after I bought it. As there were only ~11K of them sold in the U.S. and obviously a lot left on the road now, it's great to see them start to get this sort of recognition even if it's taken longer than it should have.
  • 8
    Gary Hooper Toronto, Canada August 6, 2015 at 08:02
    I find it interesting that the headline in the Hagerty emailed news above features a Toyota Supra as a "collectable" to be offered at the Monterey auction. I have owned a Toyota Supra since new in 1994 and have twice asked for collector insurance from Hagerty for that car only to be told that Hagerty would not insure the Japanese car. I also have an Alfa Romeo that is insured with Hagerty through Lant Silver Wheels. Does the announcement of legitimacy of the Toyota as a true collectable change Hagerty's stand on providing collector insurance on my appraised Supra ?
  • 9
    Robert Miller Richmond, CA 94801 August 6, 2015 at 09:57
    Gary, I have an 85 Toyota Celica GTS and it is insured by Hagerty. I suspect Hagerty declined your request because your Supra was relatively new, not because it was Japanese.
  • 10
    Mike Croce LAke Grove August 6, 2015 at 12:45
    I'm 45, and could certainly tell the difference between different 50's cars now and back when i first started driving. If anything its impossible to tell the difference between today's cars and I doubt there will be much of a market for them 50 years from now with the exception of the few throwback cars such as the dodge challenger, mustang, and camaro
  • 11
    Frank G. Swedesboro NJ August 7, 2015 at 06:58
    I currently own " THE" Rodney Dangerfield of modern classics. It is stylish, a convertible, low production, popular base model with a cult following, and a hot performer during it's production. Do you know which car from the 80's I am? ........ASC/McLaren Mustang. Never heard of one? Research the lowest production Mustang of the 80's!!!!!!!!!!! These rare cars from the 80's get no respect.
  • 12
    Matthew Curry Bellevue, WA August 7, 2015 at 11:35
    This all comes down to demographics and economics. What group has the most expendable cash for the collector car hobby? Arguably individuals in their late 40s to mid-60s. Now think back to what the hot cars were for their time in high school/college, where car dreams are forrmed. Indeed the 80s/90s vintage vehicles are primed to come on the scene. At the same time values on 60s/70s vintage iron will begin to peak.
  • 13
    Eric L South Jersey August 10, 2015 at 01:58
    I will leave my opinions on brands and models out if it . I would keep an eye out for any stylish and fun car that were rust -prone or popular enthusiast cars that were molested by multiple owners. Ex: I am watching young enthusiasts hack up all the 20th anniversary 2003 GTI's while mine stays relatively stock. The more they chop and mod, the more I want to keep mine for the future.
  • 14
    Ro Silverberg Dexter, Michigan October 7, 2015 at 10:49
    With all DUE respect to writers who can't tell 50's cars apart, they probably couldn't tell an elephant from a chicken. I was a kid growing up in the 50's and every vehicle was easily identified by grill, taillights etc. Cars today are much more generic in my opinion. The exception being the sports type--Vettes, Porsches, etc!!

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