Graph of the Week: How Condition Affects Value and Why “Perfect” Cars Command a Premium
In terms of value, it’s obvious that the best cars (condition #1) are worth a lot more than seriously flawed cars (condition #4). But over the past few years the value gap between perfect cars and ones with significant needs has grown significantly. While the difference between condition #1 and #4 cars has grown most notably for higher priced makes like Ferrari, Porsche, Jaguar and Mercedes-Benz, the trend extends across the whole market, including both auctions and private sales.
This widening gap can be attributed to a few factors. Collectors and enthusiasts have shown their preference for perfect cars with their bids at auction. Rising restoration costs and an increasingly long wait time to get a car into the most reputable restoration shops means that getting a car sorted is not as easy as it once was. Finding a car that’s already finished and in top shape can therefore eliminate a lot of headaches and even unforeseen costs, so more buyers are competing for it and driving up values.
While certain condition #4 cars have brought huge prices at auction recently, the barn find phenomenon is mostly limited to very rare and special automobiles that are presented almost as much as archaeological finds as they are project cars. For the most part, barn find mystique does not apply to the vast majority of the classic car market and shouldn’t be used as a true valuation barometer. Accordingly, we expect perfect cars’ value growth to continue outpacing project cars’, particularly if restorations continue becoming more difficult and expensive.