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.
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.
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.
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.