Editor’s note: This is the fifth in a 6-part series examining where the collector car hobby is headed in the next decade and beyond. Read the rest of the series here. Roger Falcione is the founder, president and chief executive of ClassicCars.com.
Ten years ago, the world was recovering from one of the worst recessions in modern history. Within a year, the improving economy and extremely low interest rates – coupled with some pent-up demand – sent collector car prices on the rise.
Today, the economy has fully recovered and even though sale prices have stalled recently, collector cars have had a great run. But a new challenge now faces the car world.
It’s not financial. It’s generational.
The Baby Boomers played a big part in boosting the car market back to where it is today. They were the driving force behind the rebound. The problem is Boomers are getting older. The oldest boomers are 72 and they are selling more and buying less.
Today’s buyers are known as Generation X. Born between 1965 and 1979, they tend to have more interest in cars from the ‘70s, ‘80s and ‘90s. Much like the boomers’ muscle cars, these are the cars with which they grew up, worked on with their parents or friends and made memories.
Unlike Boomers, teenage freedom and privacy from parents for Gen Xers arrived in an imported car – likely from Japan – instead of in a Ford Mustang. As they grow to be the dominant buyers in the market, it won’t come as a shock when we see the stock of the traditional muscle car plateau and even drop over time.
The real riddle going forward is the millennial generation and the rising tide of electric cars. By 2030, millennials will be between 36 and 50, typically when most classic car hobbyists start to get involved. They are the largest generation to date, but questions continue to linger about how they’ll use their buying power.
Unlike past generations, most millennials will likely have grown up without the memories of working on a car with a family member. They’re accustomed to technological developments that can alter an industry in months, not years or decades. As their use of ride-share apps and, though it’s still decades away, fully autonomous cars, they very well could be the generation that turns cars back into what they were originally intended to be.
By definition, a car is simply a means of transportation. They are made to get people from one place to another. Everything else – and I mean everything else – is purely personal; how it drives, how it looks, the comfort level, what memories it holds. If millennials look at a car more as a tool than an extension of who they are, will that not impact what a car may be worth in the future?
Then there’s electrification. Every manufacturer has a plan for electric vehicles. Some marques, such as Volvo, plan to be fully electric within a decade.
Semi-autonomous vehicles are here already, and fully autonomous cars are inevitable. But this doesn’t mean the death of the gas-powered car or driving. Most of these cars are made for well-marked city roads and there are thousands of miles out there that don’t meet that standard. There’s also the fact that, despite what some may claim, millennials enjoy driving. It is up to us to share our love of cars with them and involve them more in car related events.
As all of this unfolds, by 2030 we will likely see a drop in the run-of-the-mill classic sales. I’m not talking about the high-end cars because there will still be a market for them. It’s more the driver-quality, pre-mid-‘70s cars that simply may no longer interest a large enough portion of that generation.
For millennials, could electric cars become the next hot-ticket item? By 2030, Tesla’s roadster will be 21 years old. The original Model S will be 18. As long as they are physically maintained, there could be some interest among millennials who want a shot at owning something dated.
There could also be a massive market shift like nothing the car world has ever seen. Most electric cars do not change much and, in fact, could do away with model years altogether.
A 2012 Tesla, thanks to the internet, has the exact same software as one that just rolled off the production line (except for hardware and software related to autonomous driving). One doesn’t have to go out and get the latest model year to get the most updated technology. What matters to future generations may not be the physical body of the car, but the capabilities of the software it runs.
Big events like Monterey Car Week could breathe more life into the collector car hobby. Numerous manufacturers have used the event to roll out new models alongside classic examples. Who knows? In the future, seeing these two cars together could motivate a millennial to pick up a vintage model instead.
I don’t want to paint a grim future for classic cars because, frankly, I don’t think the future is dim. I think there’s plenty of room among the millennial generation for both gas-powered and modern-day electric cars, especially as the new generation of car enthusiasts grows older and develops more of an appreciation for collector vehicles.
I do, however, recognize that change will now happen far more rapidly and we’ll all have to work harder to adjust to that.