Insider Insight: Busting the myth of the January auctions
The January auctions, typically the Super Bowl of the collector car world, were a little weird this year. The single biggest sale, put on by Barrett-Jackson, was postponed to late March, and many other auctions moved partly or mostly online. That might leave you wondering what the January sales can tell us about how collector car values might trend in 2021. The honest answer is that they can’t tell us much, because they never do.
Car enthusiasts don’t have Magic 8 Balls or tarot cards, but they do put a lot of faith in the annual auctions each January. Whether sales are going to be up for the year, which cars are hot, and which are headed for a fall: There’s a perception that the high-volume, widely covered January sales foretell what happens next.
Dig into the data, though, and their predictive power becomes questionable, at best. Specifically, we looked at the correlation between shifts in the January auctions and the rest of the year. For instance, if Chevrolets sell for way more money in January compared to the January before, do they tend to sell for more money at other auctions?
Short answer: Nope.
Looking at the last dozen years, we see just a 6 percent correlation between price shifts for Chevrolets in January and the rest of the year. (Quick statistics refresher: 100 percent correlation means two things are perfectly correlated. Zero means there’s no correlation. Negative correlation means two things move in the opposite direction from each other.)
We do see correlation in overall sell-through rate—how many of the cars offered actually find a new owner. That tells us January might be a signal for how well or poorly auctions the rest of the year will go. But the January auctions don’t appear to say much about what will or won’t sell, and they indicate little about how particular brands will perform, as indicated by the chart below.
None of this means the January auctions aren’t important or, for that matter, lots of fun. But if your favorite collector car or truck had a mixed showing at Scottsdale or Kissimmee, don’t panic.