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.