Looking back at Buy, Sell, or Hold
Back in 2016, we began a series of articles featuring one car to buy, one to sell and one to hold based on Hagerty’s treasure trove of market data and the metrics. Two years on, it seemed appropriate to take a look back to see how we did and also what’s going on with the cars we called out.
Looking at four of the earliest pieces we put together, we did quite well, but we didn’t get a perfect score. Eight of the 12 choices put forth in the articles turned out to be correct, and four were misses. Low-production Italian cars proved hard to gauge, since three out of the four were Lamborghinis or Ferraris.
In October 2016, we called out first-generation Camaros as a “Buy.” The data indicated that they were trailing the market, but we argued that the lag in interest wasn’t permanent and that losing money on one would be unlikely. Things did in fact pick up, albeit slowly; in the 20 months since, the average condition #3 value had increased by at least 5 percent. Our pick for “Sell”—the Toyota FJ40—was a clear case of a vehicle growing unsustainably before coming back down to a more realistic market value. At the time we made the call on FJs, values had already been falling for more than a year after their dramatic rise during 2014–15, and buyer interest was still waning. There were no signs of the decreases slowing down, and indeed values had fallen an additional 16 percent just 16 months after the article was published.
Other successful callouts for “Buys” were the first-gen Bronco and the Fox-body Mustang. Broncos had already been on the rise but showed no hint of slowing down. Just 16 months later, values had risen by 32 percent. We called out the Mustangs because of their popularity among younger buyers, and the fact that they realistically couldn’t get much cheaper than they already were. After 16 months, average values had risen by 5 percent, and Fox-bodies can still be considered an up-and-comer.
As for “Sells” and “Holds” (cars expected to see few changes or cars with an uncertain future that require a “wait and see” approach), C4 Corvettes and Ferrari 550/575s were correctly picked as cars to sell, while Ford GTs and second-gen Corvairs were correctly picked as cars to hold. Just eight months after we identified C4 Corvettes as trailing the market and noting that buyer interest seemed to skip the C4 in favor of the C5, average C4 values had fallen more than 5 percent. After 16 months they had fallen 9 percent. The Ferrari 550/575, meanwhile, had just experienced a sharp increase in value, followed shortly by a drop in buyer interest, so it seemed fully priced. After 16 months, average values sit 6-percent lower than they were at the time of the article.
As for the “Holds,” we selected the Ford GT because it had just seen a dip in value, but its long-term prospects were still promising. It turns out the wait and see approach was the right one, as 16 months after the article was written average values are up 6 percent. Corvairs were selected since values hadn’t changed much in either direction and they didn’t show signs of doing so in the near future. Since the article, the story appears to be the same, with very little movement to report.
While that’s a pretty solid number of correct picks, we’re not perfect and we don’t have a crystal ball. A few cars did not perform as expected. First was the first-generation Ford Thunderbird, one of the quintessential classic American cars but also one that is difficult to pin down from a market perspective. The metrics mostly suggested that values should fall, especially with a drop in buyer interest overall and a lack of interest from younger buyers. It was therefore selected as a “Sell,” but more than a year later, Thunderbird values remain steady.
The rest of our misses were Italian cars. The Ferrari Testarossa was selected as a “Hold.” We observed a drop in values after a big surge upwards, and it was unclear when things would level out. It didn’t seem like a good time to buy, but a 12-cylinder Ferrari holds significant long-term collectability, so a wait-and-see approach seemed best. After 16 months, values had fallen by 6 percent, so the Testarossa might have been a better pick for “Sell.”
We also picked the Ferrari 355 as a “Hold,” but in this car’s case most of the metrics suggested that it might continue to grow in value and owners might want to wait and see how much higher prices could get. The growth didn’t continue, however, and after 16 months, average values are down 9 percent. The 355 also should have been a “Sell.”
Moving on to Lamborghinis, we picked the Diablo as a “Buy” because similar ’90s range-topping supercars had been doing so well and the Lambo seemed overdue for an upward adjustment. After calling out Diablos, however, average values dropped and are down about 2 percent in the 16 months since.
To be clear, the Hagerty Vehicle Rating does not function as a buying/selling indicator. It is a tool that standardizes 10 market metrics on a 0–100 scale of relative “hotness” in the marketplace, with cars scoring near 100 being considered the hottest on the market but also not necessarily the best buys. With that said, the HVR can still help identify undervalued cars. And in a market that is always changing, cars that are undervalued don’t tend to stay that way for long.