19 January 2017

State of the Market – January 2017

The more things change, the more they stay the same. That’s certainly how the collector car market seems in 2017.

The market shed speed in 2016, much as it did through 2015. But values over the past 12 months have generally remained stable, although price retreats took hold in formerly white-hot segments. Overall, North American auction sales dropped by 14 percent (now down to 2013 levels), but values for the overwhelming majority of cars on the road remained mostly unchanged. As a result, the Hagerty Market Rating only dipped from 70.41 in January 2016 to 67.19 in January 2017 and stayed at a level indicative of overall growth.

Lately, cars at the top of the market (excluding extremely rare and significant examples like the Le Mans-winning Jaguar D-Type and the first Shelby Cobra built that sold in Monterey) have seen the steepest depreciation. Models priced above $100,000 were all slower to sell in 2016 than the previous year, with values being impacted as a result—average auction sale prices for the Mercedes-Benz 300SL declined 8 percent, Series I Jaguar E-Types slipped 16 percent, Ferrari 275s dropped 22 percent, 1964-73 Porsche 911s fell by more than 30 percent and Ferrari Daytonas fell 34 percent. As further proof, the number of million-dollar sales at auction dropped 26 percent from 2015 to 2016. This tier saw the highest number of value reductions in Hagerty Price Guide 32 than at any point since 2010.

Some of this adjustment is attributable to an increase in average quality examples of these models coming to market. A stronger U.S. dollar has also dampened European demand for cars that are located stateside. In any event, supply seems to be outpacing demand.

On the positive side, rising interest in modern collector cars continues bolstering the market, although buyer preference is shifting from cars of the 1980s and ’90s to cars built since 2000. Hagerty clients added 27 percent more cars from the 2000s to their policies in 2016 than 2015, and 40 percent more cars from the 2010s.

Modern cars that are currently in favor fit the general collector car profile: low-production variants of performance models, some connection to race history and a strong historic brand presence. Leaders include cars like the impossible-to-find LaFerrari and Porsche 911R to the Ferrari 488 Italia and even more “common” cars like the Ford Mustang Shelby GT500. Nostalgia still motivates many collectors, but those same collectors are also increasingly interested in cars that provide modern conveniences (both in terms of comfort and experience). In some cases, modern cars are able to pull off both.

Outside of modern collectibles, more affordable cars are also seeing a lot of sustained interest. As buyers exercise more caution when purchasing something expensive, they also increasingly consider more options at lower price points. Presently, the sub-$50,000 market is the most vibrant segment.

The forecast for 2017 continues the course set over the last 18 months, with values holding steady overall and the top of the market perhaps stepping back slightly further. For open-minded enthusiasts who seek emotional returns just as much as financial ones, there are plenty of opportunities to find a fun car with little long-term financial risk. For most of us, that’s reason enough to be excited about what lies ahead.

15 Reader Comments

  • 1
    Howard Canada February 1, 2017 at 23:49
    If the major auctions would not inflate the pries of the "sold" cars, then just maybe the average person would pursue the classic that they want. Once that they see their dream car approach an unrealistic amount, they retreat. Eventually, the next generation will not want to participate. Don't you find it interesting that there are a considerable number of current foreign luxury autos at the auction. I did not realize the classic appeal of a 2013 Mercedes C300.
  • 2
    rob Michigan February 2, 2017 at 16:16
    I think there will be a huge collector car crash (hot rods, muscle) in 10-15 years due to the advancing age of the owners and the younger folks having a casual interest at best, with most more interested in electronics than HP. Perhaps old exotics may hold their value better.
  • 3
    Robert OH February 2, 2017 at 17:59
    I for one kind of hope the prices continue to drop so; people my age (32) will be able to enjoy these cars like most of you did in your generation. Most muscle cars were dirt cheap for years after the gas crisis and when insurance rates were high. It's hard to justify the prices of many of these cars with so many other things competing for my money which includes just the standard price of living. At one time this hobby was about the cars and not the value of them.
  • 4
    Dantheman Mystic Ct February 2, 2017 at 06:16
    Wondering if lower price points are indicators of a loss of interest or new entrants into the hobby. Thoughts?!
  • 5
    Jim S Florida February 2, 2017 at 09:03
    Went to MECUM Kissimmee this year. Prices flat to lower for most. Some higher, naturally. I predict the market will continue overall downturn and then a crash, as baby boomers age out and exit the market. Already starting to see this. As usual, very few people at Kissimmee under 55 YO. Many >65. Street rods will crash first as most kids today just don't care. They didn't grow up with these cars. High HP will always sell, tho'.
  • 6
    David Arizona February 2, 2017 at 22:18
    I work for one of the Scottsdale auctions part time and contrary to popular belief the majority of the real buyers that I saw were in their forties and fifties most of the older generation that was there was watching and not doing much bidding at all
  • 7
    Tim Texas February 2, 2017 at 11:00
    I have been priced out of my preferences of previously affordable classic cars for quite a while now. I've had a few but sold them when raising a family separated my wants from needs. I believe part of the problem for the average collector is those with a lot of money who are currently "into classics" and have driven prices well beyond the wallet of the average person. They're the ones who pop their buttons with pride when their car that they paid somebody else to restore wins a prize in a car show. I'm probably too old to hold out until they lose interest so will just hang on to my Mark VIII and C4 Vette. Both of these relatively new classics, at least in my mind, are still enjoyable & affordable. And in a couple of years I will be able to afford to begin restoration of my 68 Ranchero. And Howard from Canada, I agree. Some of what is called classic these days turns my stomach.
  • 8
    William Maryland February 2, 2017 at 11:47
    At our local show last fall about 100 mostly muscle cars and street rods, almost every exhibitor is over 65 and most are (even if you have to ask quietly) for sale. I believe Jim S is exactly right. Besides even as a lifetime Mopar guy having had many muscle cars, I cannot seriously consider another 70's muscle car when the new ones like my Chrysler 300 HEMI offer so much-400 HP at 20mpg in luxury, outrunning the old ones with the AC on. I think as our generation passes, this will get worse.
  • 9
    Eric Michgian February 3, 2017 at 01:18
    I love hearing people boohoo about car prices because that means you stopped looking leaving the deals for me. I own a lot of nice old cars, mainly 60's and 70's Chevrolets and a few Fox Mustangs thrown in to confuse everyone There are several things to consider. First, you have to broaden your list of what you will consider. If you want a 1970 Chevelle SS 396 350hp, red on red, stripe delete, bench seat, column shift automatic, with factory A/C, expect to search for a long time and pay $50,000. But if you will consider, for example, a 1965 Rambler American, a 1966 Impala, or ANY GM G-body, you will find a bargain and that's just the short list. Be willing to trade. I had a major Chevelle project car and a guy had a beautiful rust free, running and driving 1966 Impala (283 powerglide) from California that we traded straight up. I drove it for a year and sold it for $13K. I was happy and the buyer was super happy. Get off Facebook and start combing craigslist, every night, you don't need sleep, you can sleep when you're dead. You have to have cash and be ready to hop on a airplane and get there fast. The deals don't last. I missed a 1963 Nova SS convertible from California for $8000 because I was 2 hours too late. Make offers that are in your budget and leave your phone number with the seller. People are still in debt and need money so you might get a call OR wait 3 months and call them, and if they still have the car, they are ready to sell at your price. Grandma's 1987 Buick Regal with 29,000 original miles come up for sale every week for under $5000. 1993-2002 F-bodies are cheap. 1997-2005 Corvettes are $12,000 all day long and so are first gen Cadillac CTS-V's. I recently bought a completely rust free 1989 Mustang in North Carolina without a engine or transmission for $1200. You can build a nice car when you don't have rust repair and only spend $1200 on the roller. Already have an engine? Ask the seller if they will consider selling the car as a roller. You will be surprised at how many owners would be willing to take their expensive engine out of the car and use it in their next car. Open up your mouth and ask, re-read that. The worst that can happen is they say no and move on to the next car. Like the article says, supply and demand, for every 10 cars for sale, there is one buyer and you control the transaction so grow a pair and don't start the negotiation with "I don't want to insult you...." instead say "you're asking $10,000 and I can't pay that, would you consider $6500 CASH today? (and put the cash under their nose so they can smell it) and be prepared for a counter offer or say no thanks and walk away. I've had people say "on second thoughts...." 73-87 Chevy trucks are under $10,000 for a really nice one if you keep searching. I see 1968-1974 Nova's in California for $9500 all the time. I found a 1970 Camaro in California for a friend for $12,000 and a guy at work found a rust free running, driving 1966 Nova for $7000 locally. The paint is old lacquer and cracking but unless you look closely, you won't see it and since it's not mint, he drives it all the time in the summer. And about now, you're saying I wish I could find a Mopar that cheap. I found a 1971 Duster in California with a slant 6 for $2200. Go to big swap meets, Carlise, Pomona, etc. You must have cash and be willing to travel. Put your car in an enclosed trailer for the trip home. I have seen old cars on open carriers being dragged through the salt on I-80 and once you get salt on your old car, you ruined it. Buy paint and body work you can live with because that is the most expensive part of the car to fix. Repaint a red car?, expect to pay at least $10,000 to have a restoration shop do it for you. Accept patina. I love it when someone walks away from a car with ripped seats. Who cares as long as the body is nice! Seat upholstery for the front and rear seats is $800 from SMS and find a guy working out of his garage to stitch them for you for $1000. Most interiors are easy to renew and that's where you spend your time so make it nice, and remember stock is never wrong, never goes out of style, and solidifies the character of the car. High back seats do not belong in a 1965 Mustang. Want to go fast? Put a turbo on a LS engine - sorry Ford and Mopar guys, but $500 for a 5.3L is tough to argue over. As far as the older generation dying off and no one to come into the marketplace? I don't know what shows you go to but when I attend a Goodguys show, I see lots of people younger than me with a car at these shows. I was 33 in 2002 and was driving a 1932 Ford highboy 3 window coupe so you don't have to be 70 years old to have a street rod. So if you are leasing your daily driver or you bought it new, that's dumb. Get on a budget and stop leasing and buy a 5 year old daily driver and with the money you save, buy your dream car. And a word about the big car auctions, you have to be there early and stay late on the slow days. Bargains all the time. Sometimes late at night, you might be the only person bidding and if a beautiful 1966 Cadillac rolls on the block and you are the only one there to bid, you own the car for $2500 if it's a no reserve auction (most of Barrett Jackson is no reserve) Keep searching and good luck
  • 10
    Derek V Dallas February 3, 2017 at 15:55
    Jim-Are there many young people in York PA? I have the same experience as Eric at the goodguy shows. About 50/50 younger people. I'm not saying I disagree with you and I wouldn't be a buyer of hot rods like 32 coupes or old mercs or even tri-5s as I think the taste across generations change. I'm in my 40s and yes there are guys I know who love those cars....not near as many guys I know who are in there 60s. The classics like a 300sl or 275 GTB 4 cam will NEVER be bad investments. Of course, I'll never know.
  • 11
    Jim S Cape Canaveral February 3, 2017 at 10:33
    Eric, I have attended many street rod shows, including the giant Good Guys in York, PA. NOT MANY YOUNG PEOPLE THERE. Not enough to support the amount of cars for sale - LONG TERM. Cars are going to continue to change hands among the older crowd. That is active now and will remain so til BBoomers get older. Bargains can be had because people are trying to sell. At Mecum there was a very large amount of NOT SOLD. People are trying to get the higher prices for nice cars but they don't get that the market is gradually shrinking.
  • 12
    Chuck Ohio February 4, 2017 at 13:27
    I agree that the 60-70's car market will take a pretty heavy dive within the next 10 years max, due to aging boomers bailing out of the market. I see that occurring now in the British car segment where I collect. There will be people to buy but not as many, which should drive prices lower. When I drive my MG the youth of today don't give it a second look. When I pull up in my VW GTI I frequently get complements from the young guys. That is what they lusted after when they were 16, just as we did for MGs.
  • 13
    Mike Soquel, Ca February 8, 2017 at 11:36
    I too have wondered about a crash in the price of many of the older classics. My 70 240Z however gets a lot of interest from younger people as well as old. My sons friends who are in their 20's love it.
  • 14
    Greg Oregon May 18, 2017 at 14:15
    When observing the general interest of 20 - 30 somethings in classics, car shows and auctions may not be the best indicator. This group has different ways of shopping than the older generations. Take the decline in the brick and mortar malls versus Amazon's growth as an example. I do a specific line of 70's muscle cars. The values increase every few months. I have to admit most of the customers are in their 40's and 50's buying the car they had or wanted when younger, but there are substantial amount of younger people buying also. When moving these cars to/from the shop a lot of teenagers express their interest in owning a car like it in the future. The future values of collector cars may just be more vehicle specific than currently. My opinions only.
  • 15
    George TX June 30, 2017 at 21:33
    My passion is older European cars and have too many to count. These were purchase as project cars for a reasonable amount. I am currently trying to sell 6 cars cheaply, one for $500, and I get lots of calls and requests for pictures but no serious buyers. My fear is that the state of the economy is going to worsen soon and that coupled with the coming of self driving cars is going to put an end to the average Joe buying and collecting cars. In my case I don't want to be left holding a bunch of worthless cars. Not that my cars are worthless but could they become worthless in the very near future.

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