Although mountains of data support the work at Hagerty Insider and in the Hagerty Price Guide, it’s also recognized that the collector car market operates on emotions and relationships. That’s why regular conversations with the people who keep the market moving are essential. Now that the 2024 calendar is past its halfway point, industry professionals and experts were consulted to gain their insights on the current state of the market, how things have changed since the last discussion in late 2023, and what their outlook is for the future.
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A Return to Rationality
During our conversations from last December, market observers characterized the market as “cautious,” “softer,” and “selective” but still “healthy.” That sentiment has mostly continued into 2024.
“The word ‘rational’ describes this market in the sense that it’s not balanced too strongly in favor of buyer or seller,” said Derek Tam-Scott, a principal at the Bay Area specialty dealer OTS and Co. who also contributes to this site and co-hosts The Carmudgeon podcast. “Every so often [a price] will go kind of wild, and every so often something perfectly good sells cheaply, but prices for things are easy to justify or explain. There was a period during the pandemic where a lot of sales were making people go, ‘What on earth is going on?’ But it’s easier to explain what’s happening now.”
“Strong but difficult” is how Dave Kinney, founder of US Appraisal and publisher of the Hagerty Price Guide, described the market. “The trend of everything selling no matter what kind of condition it’s in as long as it goes on a classified ad or auction site has scaled way, way back. The era of salesmen waiting for the customer has changed to the era of salesmen actually having to sell their cars and get the customer interested. That includes both individuals and dealers.”
Kinney also characterized the marketplace as being “very, very picky right now.” Mark Hyman, founder of Hyman Ltd. in St. Louis, had a similar assessment. “The market is still quite good. However, the market is far more selective than it once was. There is plenty of demand, but there are some cars that work really well and are very easy to sell, and there are other ones that people aren’t as into.”
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There has been plenty of talk about softness and cooldowns this year. Tam-Scott added that “recently appreciated stuff is the first to depreciate” and said he’s observed some softness in the lower end of the market. But most prices remain high and above their pre-pandemic numbers. Kinney noted that “the extreme upper end of the market has some challenges, but overall it’s very strong.”
Barney Ruprecht VP of Auctions at Broad Arrow, felt that the market “is in a better place today than at the end of 2023. There appears to be less uncertainty overall. The end of 2023 was very much ‘what’s going to happen next,’ whereas today I feel there is increased activity due to people not questioning tomorrow’s values.”
Adolfo Massari, founder of LBI Limited, conveyed that “we have a better idea of what to expect than we did six months to a year ago. Coming off the highs in 2022-23 seemed volatile as the market was finding its footing once again. We spent the entire year on the edge of our seat wondering how long this cooling down period would last. Right now, the feeling of finding a light switch in the dark is less prominent. We’ve experienced a healthy corrrection/leveling off that I welcome as it is much better than a bubble bursting.”
For John Kraman, director of company relations for Mecum Auctions and the company spokesperson at public events, “Despite the fact that we’re in this kind of post-COVID era where there’s a heightened sense of interest and price, collector cars in general really seem to be continuing to ride really high.” Kraman was also the only person we chatted with who brought up the 2024 U.S. presidential election, mere months away. While the election might ordinarily suggest a sort of wait-and-see approach in the market, Kraman noted he hasn’t seen it have any particular impact.
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While not all buyers finance their collector car purchases, respondents also noted that higher interest rates have shifted the collector car ecosystem a bit.
Although the “investor class is buying investor automobiles as they have been,” said Kinney, “the free money era is over, so people are paying out of their pocketbooks and making decisions based on exactly what a car is going to cost.”
During the hotter years of 2021 and ’22, some speculators did seize upon collector cars, sensing an opportunity to capitalize on a visibly growing asset class. Now, though, “speculators have dissipated with the market like it is now and with higher interest rates,” said Jose Romero, sales manager at the Houston dealer DriverSource. “With rates higher, they’re tight on buying power and with inventory moving slower, that’s going to take a lot of your speculators out of the picture.”
Massari concurred that “these market peaks and troughs tend to weed out faux enthusiasts and investment types who buy purely on speculation, which in turn reduces artificially high prices for makes/models that really do no warrant them.”
Even though speculators have largely moved on, Ruprecht argued that “I think the use of financing at all levels has become more common throughout. I wouldn’t limit that to the last six months only, but certainly within the past six months our ability to provide finance has directly led to closing some significant deals.”
Tam-Scott has also noticed that “there are definitely fewer of the speculator types than there were before,” and that “people who came into money relatively recently and then caused rapid movement during the pandemic weren’t always long-term players. They moved a bunch of stuff in ways that were kind of irrational, almost like fads, but these people have mostly now left the market.”
He noted another group of people who aren’t as active: “There were a lot of new people joining the fray during the pandemic because they couldn’t do anything else. They had an interest in cars but finally expressed it because cars were one of the best ways to entertain yourself at that time. But those people might have competing interests that they can now engage in and so they’ve moved on to world traveling, or whatever it is, instead of cars. Those people are not as engaged as they used to be.”
Managing Expectations
If buyers and sellers had trouble seeing eye to eye a couple of years ago when prices were changing from month to month, they’re having an easier time now.
“This conversation was a tougher one to have a year ago than it is now, because things have been stable for the last year compared to the year that preceded it,” said Tam-Scott. “There will always be people who in any market always think that their thing is worth more than it is, but most people now understand that the landscape of the market is different than it was in early 2022.”
For Ruprecht, “buyer and seller alignment is always a moving target!” But also that “overall, reality has sunk in that some segments were overheated during the pandemic days. Thinking back to the previous cycle of 2015-16 where Ferrari values were at peak levels, I think today buyer and seller alignment has narrowed in a shorter period of time.”
Kinney observed that “sellers have become much more realistic than they were in the last three or four years. More and more people also seem to be willing to let their cars go on a no-reserve basis at auctions.” While Hyman noted that the market isn’t as predictable as it was many years ago and that “today it’s a little more difficult for me to tell one of my consignors exactly what a car is worth,” when asked if buyers’ and sellers’ expectations are more closely aligned than they were a year or two ago, his answer was unequivocal: “Yes, without a question.”
Massari answered “yes!” and that “there is always a lag time between buyer vs. seller expectations when the market changes but we have certainly experienced more compromise between the two in recent months.”
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Kraman, on the other hand, has a slightly different read: “Prices over the past two to three years have been so good, and the perception is that the market is good, so it’s drawing a lot of cars and a lot of collections that may not be up to the high quality of the ones that really rang the bell and made headlines before. So we’re dealing with sellers expecting a very high level on cars that aren’t necessarily up to that level. Our biggest chore [at Mecum] right now is managing those expectations, having them compare apples to apples and not apples to oranges.” He adds that getting consignments is no trouble at all, but “getting people to understand realistically what the car might bring” is.
What’s Hot, and What’s Not?
“Last time we talked, I mentioned that cars from the 1980s and ’90s like Lamborghini Countaches and Diablos and gated [manual-shift] Ferraris were the flavor of the month,” noted Romero. “That’s still the case,” he says. He added that late-model exotics, up to 2020, are in high demand. Kinney, too, noticed that cars from 2010 and later are a growing area of the market. “There’s a very strong marketplace for cars that should have depreciated but didn’t, and the manufacturers have been able to make very limited editions of some supercars or near-supercars, which has kept interest going.”
“Porsches are basically exempt from market trends right now,” said Tam-Scott of 911s. “They’re the gold standard in terms of cars performing as an asset and as an investment, plus they’re easy to own and everybody knows what it is.”
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“Trucks and 4x4s have been strong for a while, but they are still adding a tremendous amount of energy and drawing in new customers. The truck market is just roaring,” said Kraman.
“Supercars/hypercars like the Porsche 918 and LaFerrari in particular have shown dramatic growth in terms of market prices rising. The 918 in particular has risen significantly in the last six months,” said Ruprecht, pointing to a record price for a “normal” (non-special livery) 918 at Broad Arrow’s Air|Water auction in the spring. “The market is much more buoyant today for modern sports cars than almost everything else. Compare what might sell faster and easier, for generally speaking the same money…a 993 Porsche Turbo S or a Ferrari 250 GT PF Coupe?”
As for what’s struggling, it’s cars with significant needs or issues. “We used to sell a lot of barn-find stuff and cool, real vintage finds,” noted Romero. “There’s still a market for that stuff, but a lot of people aren’t into projects anymore and fewer people are into anything pre-1960.”
That doesn’t mean that nobody is interested in anything pre-1960, argued Kraman. “With ’50s cars, people were saying ‘oh those buyers are aging out’ or ‘nobody wants those cars anymore’ but then we see a ’57 Chevy or a ’59 Impala roll across the block and bring a six-figure price. Whether they’re stock or lightly updated or heavily restomodded, some of those cars from the ’50s seem surprisingly strong right now.”
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Ruprecht also noted diminished interest in what he calls “yesterday’s trophy” cars. “What I mean by that is certain cars/markets that once were the crown jewels everyone had to have, are totally overlooked today. For example, many of the 4-cam Porsche 356s. Previously a 4-cam had to be in every great Porsche collection. Looking at the Porsche market today I see more significant collectors without a 4-cam than those with one.”
Massari was similarly specific, noting the “fairly dramatic value decline of stable and iconic 1950s-60s British sports cars that were, once upon a time, breat-and-butter sales for us. Jaguar E-Types, XKs, Big Healeys, MGs and the like have experienced drastic declines in desirability. The market is flooded with them at very attractive prices.”
But while “some of the newer cars are doing well and some of the older cars are doing not quite as well,” as Hyman noted, “really good quality and really important older cars are performing better than ever. The operative words here are quality and importance. Importance also equates to rarity, so prewar cars for example that wouldn’t be doing as well would be more run-of-the-mill models—rebodies, cars with issues or unimportant coachwork—but in any sector, really good cars with either extraordinary provenance or extraordinary restorations are doing really well today.”
Condition, Condition, Condition
All of the experts we talked to agree that exceptional cars are still selling very well and that mediocre ones are a harder proposition. We’ve covered repeatedly how the best examples of the best cars continue to bring the best results even when lesser examples struggle, and that trend appears to be continuing.
“Condition, condition, condition is everything in this day and age,” according to Kraman. “The price of restoration and parts is going through the roof, so obviously buying something that’s turn-key ready is more predictable from a financial standpoint.”
“The best is always a different market to ‘average’ cars and many don’t understand or realize why that is,” according to Ruprecht.
“Good cars are always in demand,” said Hyman. “If the car you’re buying is really great quality or a car that’s important, there will always be a buyer for it down the road.”
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“The cars that are ready to get in and drive or ready to show are the cars that we sell first,” says Romero, “and they sell for a premium.” In addition to high restoration costs, which many of the experts touched on, Romero has also noticed a shift in buyers’ priorities. “Ever since Covid, I think people value their life and their time a lot more, so when it comes to these cars, instant gratification is a big part of it now. When you’re spending a lot of money on one of these things, when you get it home you want to be able to use it. For something truly special or unattainable you might have the stomach to pay a restoration company for the next three years, but the casual guy isn’t interested in that anymore. They want instant gratification, for sure.”
The draw of instant gratification isn’t limited to just buyers. Sellers feel it as well. When working with consignors, Romero gives them two options. “I’ll tell them this is what the asking price should be and this is what the commission is going to be and that’s option one, or I can wire you money right now for this amount and that’s option two. Nine times out of 10, they’re going to take the money today and just be done.” Kraman also pointed to an increase in collections consigned to Mecum’s auctions, with sellers drawn to the appeal of moving the whole group at once instead of going through the headache of selling off each one individually.
Uniqueness
In addition to certain types, eras, or genres of vehicles attracting more attention, certain attributes of a vehicle are in high demand right now as well.
“Something that’s really extraordinary gets people to come out of the woodwork and say, ‘I don’t really care what the market is doing, this car would be so hard to reproduce so I’m going to pay up for it,’” said Tam-Scott. “An unremarkable car in a remarkable configuration can cause something like that to happen. Whether it’s condition or configuration, rationality can go out the window and it’s very difficult to put a value on something like that until you get it on the open market.”
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What does “remarkable configuration” mean? Basically, a combination of factors that are either very difficult or impossible to find or replicate. This happens with cheap cars as well as ultra-valuable ones. “It could be all the way from a Mitsubishi Colt, where they’re just all gone except for this one, all the way up to a big Ferrari that was driven by all the right people at all the right races, or really any car that has the right answer to every question, every option that everyone wants, and none of the ones people don’t want, and it’s the right color. Then, all bets are off.”
Tam-Scott also touched on social media’s role in the market today. “Trends are very rapidly disseminated so there will be this interesting convergence on certain things, like ‘roof racks are cool’ or ‘green on tan is cool’ that results in everybody consuming similar content and consumers having their preferences shaped by a few people who have a lot of reach. It’s difficult to pinpoint where these trends actually originate but there will be this sort of converging in terms of preference and specs.”
Passing the Torch
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It is impossible to ignore the demographic shifts in the collector car hobby.
For Kinney, the continued growth in interest for 1980s and 1990s cars among younger, newer buyers entering the hobby “is just the normal progression of the marketplace. And the good news is that all the reports of younger people losing interest altogether in automobiles turned out to be just noise.”
Kraman admitted that Mecum’s “younger” buyers are mostly in their 40s, but he also pointed out that those customers came of age in a very different automotive environment than older ones. “This new generation of buyer remembers when collector cars in general have pretty much always been expensive. They don’t remember the days of the boomers where in the ’70s, where Corvettes and muscle cars and even some exotics were virtual pocket change compared to where they are today. They’re more legacy buyers than nostalgia buyers. They have been used to these cars being high-priced and they’re OK with it.”
Kraman noted that younger buyers do enjoy newer vehicles but said that they also embrace more analog automobiles and pay up for manual transmissions. He pointed to younger buyers being drawn to the forbearers of their newer Shelby GT350s and Dodge Challengers as well as some surprising choices like ’60s Buicks and Lincoln Continentals.
Massari pointed to “younger restauranteurs, small business owners, tech entrepreneurs, and a whole host of other buyers which really speaks to the approachability of the collector car hobby that has certainly changed for the better over the past 10 years.”
The youngest buyers Tam-Scott deals with are typically in their 30s. In general, he says, “Buyers seem to be less knowledgeable than they used to be, and maybe this is the flip side of the social media coin in that they don’t get a lot of in-depth, first-hand knowledge or experience there. But it’s not that they aren’t interested in learning. They are.” He also observed that “there will always be a core group of people who are buying and selling cars no matter what because they truly love cars, live and breathe them. They were always part of the scene and they will always exist. But now as the hobby becomes more mainstream and its appeal is broadening and is even credible as an investment class, I think it does introduce categories of people who don’t know that much who are interested in participating.”
Hyman also noted the “changing demographic picture, which means changes in different segments so certainly some of the newer cars are doing well,” and he also put it all into perspective. “I’ve been in this business 36 years and there’s constantly change. Change means there’s opportunity for both buying and selling. I think the beautiful thing about this industry is that there are so many players and there’s so much interest that there will always be people who love buying cars. Everybody’s always talking what the market is doing or trying to analyze it. Well, it’s changing and it has been changing constantly, so even though we spend a lot of time trying to analyze it and figure it out, part of the fun is that we never do figure it out.”
Report by Andrew Newton
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