Laws of supply and demand impact collector car prices

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Not only are there a lot of auctions, but also a lot of the same cars

During 2019, we saw many changes in the collector car market. Prices have been fluctuating quite a bit, and prices on cars that were once thought of as recession proof (think 7-figure, Monterey-style cars) have been down most significantly. 

Some of this is due to the large number of cars on offer combined with a few missteps by big auction companies with star lots.  Also, the fact that the interests of newer and younger buyers are different from those of collectors in the past; many of the newcomers have little or no connection with the cars that the older generation coveted.

For example, cars that were the bread and butter of the lower end of the market, think Tri-Five Chevys, Detroit muscle cars and the like, also have been the subject of falling prices, often by as much as 30 percent. Again, this is likely due to the new generation of collectors having no connection with those cars. These collectors have never seen American Graffiti and are not likely to do so anytime soon. 

All of this has meant that the traditional auctions were no longer the sure thing in delivering strong prices, and especially with consignors setting reserves based on prices being paid 2 or 3 years ago. In the past, if you were selling a collector car and wanted top value, your best choice was to sell it at a live auction venue. This is no longer the near-certain success it used to be. 

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A row of Corvettes from which bidders might choose

Another growing problem is that there are too many auctions and too many new auction companies. This has made for a situation with more and more inventory of classic and collector cars available at any  auction, practically every week. In essence, there are too many of the same types of cars available, so if you don’t buy that Mustang or Camaro you are looking for this week, you can simply wait until next week and find another you like.

Another factor that represents a change are the increasing number of online classic car auction sites. This adds to the number of cars on offer and is flooding the market with similar merchandise.

Finally, there are a number of collectors who are simply aging out of the hobby. The cars they collected, and which they rode on the wave of increased values for so many years, are now both falling in demand while at the same time, there are too many of them on the market.

All of these factors are driving prices down. In a nutshell, there is just too much of the same inventory for sale at the same time.

One place in the auction space that has been going quite well is the sale of single collections.”

Some consider online auctions as a savior, but this may not be the case. Yes, cars are selling, but the sell-through rates are not much better than at traditional auctions, and from a seller’s point of view there is risk with an online sale as well. 

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Also the cars listed on some sites are much the same as that being offered by traditional live auction companies. When these like cars are offered for sale online, they do not tend to demand any more money than they would at a traditional live auction. 

There is another thing happening with the online auctions. They tend to list multiple numbers of the same marque and model rather than limiting the volume of similar cars, something the traditional auctions do as a way to enhance values.

One place in the auction space that has been going quite well is the sale of single collections. The best example recently was the Taj Ma Garaj auction by RM Sotheby’s. This auction featured scores of air-cooled Porsche and VW cars, and they sold for absolute top value. 

Such events differ from standard auctions in that they bring like-minded collectors to a venue to bid on the cars they love most. 

With more and more boomer-generation collectors divesting themselves of their collections, look to see many more of these types of sales in the future. One potential drawback is that the cars offered at such sales are likely to be the same cars that are at best maintaining flat values in today’s market, which again points to the issue of too much inventory at the same time.

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So, what does the future hold for collector cars? I would say that the blue-chip cars of the past are likely to continue to drop a bit in value as the number of these cars offered continues to increase.  A positive note for the buyer is that this could make cars that were unaffordable to many are coming down in price and becoming more attainable to more collectors.

One important caveat is that no matter what car you are looking to buy, you should work hard to find the finest example you can afford. The reason for this is that in our current market, the trend is that only the very top-condition cars are likely to increase in value.

As always, only buy a car you really want to own. If that car is over a price you can afford, you might want to wait and see what the market does during the upcoming Arizona Auction Week. If the market drops a bit more, you might soon be able to afford that car you have always wanted, but thought was out of reach.

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Andy Reid's first car, purchased at age 15, was a 1968 Fiat 124 coupe. His second, obtained by spending his college savings fund, was a 1966 Ferrari 330 GT 2+2. Since then, he has owned more than 150 cars—none of them normal or reasonable—as well as numerous classic motorcycles and scooters. A veteran of film, television, advertising and helping to launch a few Internet-based companies, Reid was a columnist for Classic Motorsports magazine for 12 years and has written for several other publications. He is considered an expert in European sports and luxury cars and is a respected concours judge. He lives in Canton, Connecticut.

8 COMMENTS

  1. I assume the selling trend for collector autos with a very small number of them available is still is remaining strong. This does bring a question to mind – has anyone done research on what the existing/future inventory number might be (1, 10, 50, 100) where the selling trend continues to remain strong? I have been interested in purchasing a 1967 Shelby Mustang GT350 or GT500 for several years but after reading this article am concerned that future value will decrease significantly. I would like to purchase such vehicle and enjoy such for 10-20 years before selling it to make a modest (10%+) profit.

    • The 67/68 GT 350s and 500s seem all over the map. However, 67/68 Mustang fastbacks have been soaring the last year or so. Your timeline for profit may be unrealistic. Who knows what a Millenial or Gen Z will buy 10/20 years out. If you have the money, buy the Shelby you like and enjoy I while you’re still alive.

  2. Yes watching the last Mecum action on TV I was astounded at the low prices of a lot of the cars and pick-ups. Cancelled my Barrett Jackson trip to Arizona till I see what happens to prices there. A lot of these builders are losing the butt for the price these vehicles are going for. H.ad I sold my 32 when I did.

  3. Could it also mean in addition to the other factors already stated that there is something underlying going on in the economy like after the 2007 crash where cars where heavily discounted because they needed the cash.

    Just a thought.

  4. My true love are the pre-war classics like Packard,Lincoln,Pierce Arrow. The problem is these cars values are dropping faster that the age group that once supported the markets ,well as parts and restoration costs sky rocketing. If you spot the auction buyers you will notice the upper age brackets. The sellers of these cars are lost in the sixties price wise, when you could buy a new truck for under thirty grand, and a classic was 100 grand, now reversed!

  5. I only see donk Box Chevys at auctions 1986-1990 caprice broughams LS folks sleep on this car but with chevy performance engines, you can really do a number to this car and make it as fast as any chevy made. I have an 89 with all the upgrades.

  6. I am a professional pinstriping artist that has dedicated eleven years to the restoration of the bus that was the studio, workshop ,machine shop and home to the Father of the Kustom Kulture, now that it is ready for market, there are several people because of political correctness are ready to dismiss this mans accomplishments because of statements he made over twenty years ago about German precision in general, but also for the shock effect his comments garnered from anyone that would listen. To me the art form that he started far outweighs any rambling for shock value over twenty years ago. What to do at this point has me wondering how to go forward with this project,
    so that the many young and old Artists that have dedicated their lives to this American art form can experience the pride and gratification of seeing this bus that was Von Dutch.

  7. A personal possession / vehicle of Von Dutch
    Is an important piece of automotive history and art in general. This transcends politics, or will with right minded people.

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