Hagerty Price Guide Index Review: September 2011

As we have discussed in various venues for some time now, the collector car market is a bifurcated one, with the best examples of the most desirable cars accelerating in value, while more common cars with stories are not. This trend emerged several years ago and is as true now as it has ever been. The Hagerty Indices have been updated for September 2011, and they illustrate this trend well.

The two indices that best represent the upper end of the market are our Blue Chip index and our Ferrari index:

Blue Chip Index

Hagerty Price Guide’s Blue Chip Index continues its climb with a fifth consecutive period of growth. This time our A-Listers moved up 5%, leaving them 17% ahead of a year ago. Out of the group of 25, 13 increased in value, three decreased, and nine saw no change.

Top movers were the Jaguar D-type with an 11% uptick since last May, and the Mercedes-Benz 300SL Gullwing, with a long-anticipated 14% move. The Lamborghini Miura SV also rose for the seventh consecutive period, this time at a 7% clip.

The current school of thought is preaching an inverse relationship to the stock market and top-tier collectibles, including automobiles. As Wall Street experiences exceptional volatility, investors of means are seeking out the best examples of the best cars to park their money for a time. You don’t have to look far to find a handful of examples of people who made a few million dollars during the past five years on the sale of a single automobile alone.

Ferrari Index

Once again, the Hagerty Price Guide Ferrari Index followed the same path that our Blue Chip Index did. Or is it the other way around? Regardless, this group stepped up 7% since May and is 23% ahead of where it was a year ago. All but one of the component cars moved forward, with the lone straggler – the 1972 Dino – holding steady.

Again, it’s a story about the best cars bringing the best money, and Ferraris have long been considered the best among enthusiasts. With plenty of spotlight during this year’s Monterey week (GTOs at Pebble Beach and a record-setting Testa Rossa sale, among other notable sights), things aren’t likely to change in this arena during the near term.

Our other high-dollar index, Hagerty’s Index of Collectible American Muscle Cars, did not fare as well during the past four months, as this market continues to search for footing following the bursting bubble of 2008:

Muscle Car Index

The last time we reported on the Hagerty Price Guide Muscle Car Index, we were sharing positive news about the trends we were witnessing. We also wondered aloud if this signaled a strengthening of American tire-squealers. It turns out the market didn’t agree with our cautious optimism, and the Smokey Burnout slid by a point. More than half of the component cars saw their prices drop, though only one of those cars was hit by a decline of more than 4%.

The good news? American Muscle is still up 8% year-over-year, and hasn’t seen more than a 2% decline in seven straight periods. Buying opportunities are still lingering here, but be prepared to patiently enjoy your purchase.

The remaining four “primary” indices on which we regularly report had mixed results that mainly follow the phenomenon stated above: The best “global” cars continue to excel, while the remaining cars do not.

British Car Index

Our British Index dropped by 2% since May 2011, mainly due to falling prices of Austin-Healey 3000s. Big Healeys can still fetch huge money with the right presentation at the right venue, but this is now the exception rather than the rule. These cars have slipped 12% during the past four months and 19% during the past 12.

The rest of the group was relatively stable, with seven of the remaining nine component cars changing less than 4%.

German Collectible Index

Of all the submarkets Hagerty regularly tracks, our postwar German Index has been the most consistent. There have only been two declining periods since January 2007, with all but two of the positive periods seeing gains between 1% and 5%. Even when all other areas of the market were in a marked slide, the Silver Arrows were only knocked off their stride by 2%.

The past four months continue the trend, with a 4% uptick. Top gainers were the Mercedes-Benz 300SL Gullwing and the Porsche GS Carrera Speedster seeing increases of 14% and 17%, respectively. Interestingly, this group’s earlier gains were courtesy of A-rated BMWs like the 507, 3.0CSL, and M1. Those cars seem to be fully priced for now, and interest is spiking elsewhere in the group.

1950s American Index

Hagerty Price Guide’s index of collectible 1950s American cars continued its holding pattern over the summer.

Although, “dormant” is probably a better term considering that this is the 24th straight month of nominal change in the group’s value. We have repeatedly pondered whether or not the typical buyer of this type of car is exercising caution due to impending retirements (and therefore there is latent demand that is simply not being acted upon), or if interest in fins and chrome is waning in general. In reality, the truth is probably a combination of both factors—demand is lessening overall, with those remaining interested buyers currently exercising restraint.

Top movers here were the Packard Caribbean (up 12% since May) and the Continental Mk II (up 9% during the same timeframe).

Affordable Classics

Small Cap only saw one component car increase in value during the past four months (the MGB inched up a point), while five cars dipped and the remaining seven held firm. Most affected were the AMC Javelin, which plummeted 12%, and the Karmann Ghia, which slipped 6%.

This activity left the index down 2% during the past four months as well as for the preceding 12. Over the past five years, though, the Small Cap Index remains 7% ahead.

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