collector car market / Hagerty

Totally unscientific, but our Cars & Coffee has about 300 cars and most folks are under 30. I do see cars going electric. I'm seeing it first hand in fact with one client.

2017 Results consistent with my commentary.


"vintage car auctions during Monterey Car Week. Across six companies, preliminary numbers show sales totaling $327 million at Pebble Beach over the weekend, down 3 percent from last year "

https://www.bloomberg.com/news/arti...pent-327-million-on-vintage-cars-this-weekend

Kayvan said:

2017 Results consistent with my commentary.


"vintage car auctions during Monterey Car Week. Across six companies, preliminary numbers show sales totaling $327 million at Pebble Beach over the weekend, down 3 percent from last year "

https://www.bloomberg.com/news/arti...pent-327-million-on-vintage-cars-this-weekend

Click to expand...

3% - something like 6 cars - no big deal.

"Perhaps more worrisome, car collectors are getting older, with some baby boomers deciding to leave the market....

It is an actuarial certainty that car collections amassed by baby boomers will come to market in increasing numbers, and probably relatively soon. It is unclear whether Gen Xers and millennials will have the money or the interest to absorb such an abundant supply of collectible cars.

https://www.nytimes.com/2017/08/24/...ble-beach-concours-delegance-car-auction.html

Interesting observation. I think when the boomers die off the world is going to be in a hurt. Expensive real estate, tourism, any expensive artifact is going to sink in value over the next 30 years. Who is going to keep it up?

The greatest exchange in the history of wealth is about to occur. Now is a great time to buy a business that lacks a succession plan.

Collector cars from the 60s and 70s (with the exception of $1M+ vehicles) have plateaued and will never come back. Chase the demographics and the money will follow. If investing, and not driving, is your game buy 80s, 90s and 00s analog manual transmission cars. While you are at it buy 80s BMX bikes and skateboards. My original Redline RL 20 is selling for $5,000 now. I paid $60 bucks for it in 1987.

I just sold my mint 3600 mile GT for $245K. I think thats about market right now. Bought an F40 with the proceeds and some cash.

^^I agree with all of your observations.

I would not have sold the FGT tho.

Statistics

5 million collector cars in USA*

60% owned by Boomers* = 3 million Boomer collector-owners

76 Million Boomers in USA; 3 million collector-owners is 4%

10 Million Boomer projected to pass in next 10yrs

4% of 10 Million = 400,000 cars coming to market over 10yrs or 40,000/yr

*Hagerty/C&D est.

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Collector car sales (>$25K)

20,000 at elite auctions ('16)
60,000 eBay (<1989; ~5,000/mo. *12)
120,000 Hemmings (<1989; ~10,000/mo *12)
---------
200,000+ Total Market

Adding 40,000 to a market of 200,000 will have impact on pricing.

http://www.caranddriver.com/feature...-classic-car-marketand-could-crash-it-feature

Agreed. This is called generational shift. Let's assume most of us are part of the babyboomer generation. How many of us are actually interested on steam-engined car or the chitty-chitty-bang-bang cars? Very few, right? Therefore, in 10-15 years, the interest, hence value, for the 60's cars will go down. This is the right time to buy dream cars from the 80s and 90s.

matteuson said:

The greatest exchange in the history of wealth is about to occur. Now is a great time to buy a business that lacks a succession plan.

Collector cars from the 60s and 70s (with the exception of $1M+ vehicles) have plateaued and will never come back. Chase the demographics and the money will follow. If investing, and not driving, is your game buy 80s, 90s and 00s analog manual transmission cars. While you are at it buy 80s BMX bikes and skateboards. My original Redline RL 20 is selling for $5,000 now. I paid $60 bucks for it in 1987.

I just sold my mint 3600 mile GT for $245K. I think thats about market right now. Bought an F40 with the proceeds and some cash.

Click to expand...

Add to al of this the cultural shift that is occurring.

Most of the kids coming up just aren't into cars. Collectible or not.

Their sense of freedom is held in the palm of their hands.

Kayvan said:

Statistics

5 million collector cars in USA*

60% owned by Boomers* = 3 million Boomer collector-owners

76 Million Boomers in USA; 3 million collector-owners is 4%

10 Million Boomer projected to pass in next 10yrs

4% of 10 Million = 400,000 cars coming to market over 10yrs or 40,000/yr

*Hagerty/C&D est.

----------------

Collector car sales (>$25K)

20,000 at elite auctions ('16)
60,000 eBay (<1989; ~5,000/mo. *12)
120,000 Hemmings (<1989; ~10,000/mo *12)
---------
200,000+ Total Market

Adding 40,000 to a market of 200,000 will have impact on pricing.

http://www.caranddriver.com/feature...-classic-car-marketand-could-crash-it-feature

Click to expand...

Interesting read. I find it ironic that Hagerty has become bearish on classic car pricing the last couple of years. When I spoke with McKeel a couple of years ago at a function and posed these same concerns, he kept stating how there was a finite supply of great cars and that more wealth was being created globally thus he felt that prices would continue to climb for many years. I guess he feels differently now.

It seems to me that it's the old story: buy what you like and not for investment. Whatever happens, you will have had the chance to enjoy whatever it was you bought and DROVE.

My take is there wont be a crash; just grinding stagnation in certain models OR a sector rotation.

'Glamour' models like 60s Ferraris, Daytona, 275 GTB, E-Types, Astons, Miuras/Count. will march on as new generation embraces glam, retro, swagger of iconic models.

Technical models (design OR horsepower) 911 Air-cooled, 300 SL Gullwing, American muscle will stagnate sideways.

Stagnation will be driven by sellers who dont need to sell; but when they do, it will be all.

Case in point is the Gullwing, while revolutionary; its becoming "Granpas Exotic". nearly 99% of 1400 owners are over 65 if not 75...some are original buyers. Further, vast majority are driver-quality (rallying is huge) or 25+yr old restorations done in late 80s. The barn-find fetish is a fad.

From 1989 to 2000 their value went nowhere and in real terms, highs of '89 are almost flat to today's prices.

http://www.slmarket.com/wp-content/...0-Series-Price-Chart-SL-Market-Letter-WEB.jpg

My view is they will not move far; between drum brakes, heat-sink interior,meticulous maintenance req's and $50K spare parts....takers will be few. As heirs cant afford insurance/storage AND younger generation don't have mindset of M-B halo (M-B Mom-SUV v. tired/worn blue chip collector.)

Will be great buying opportunity as nearly all 1400 will turnover in ownership in next 10yrs.

Its happened in Fine Art; museums cant afford storage of Old Masters while Contemporary/Modern mid-centruy art is flying off walls.

Agree 100% with Vincent and Kayvan.

Kayvan said:

My take is there wont be a crash; just grinding stagnation in certain models OR a sector rotation.

'Glamour' models like 60s Ferraris, Daytona, 275 GTB, E-Types, Astons, Miuras/Count. will march on as new generation embraces glam, retro, swagger of iconic models.

Technical models (design OR horsepower) 911 Air-cooled, 300 SL Gullwing, American muscle will stagnate in flatline for some time

Case in point is the Gullwing, while revolutionary; its becoming "Granpas Exotic". nearly 99% of 1400 owners are over 65 if not 75...some are original buyers. Further, vast majority are driver-quality (rallying is huge) or 25+yr old restorations done in late 80s. The barn-find fetish is a fad.

From 1989 to 2000 their value went nowhere and in real terms, highs of '89 are almost flat to today's prices.

http://www.slmarket.com/wp-content/...0-Series-Price-Chart-SL-Market-Letter-WEB.jpg

My view is they will not move far; between drum brakes, heat-sink interior,meticulous maintenance req's and $50K spare parts....takers will be few. As heirs cant afford insurance/storage AND younger generation don't have mindset of M-B halo (M-B Mom-SUV v. tired/worn blue chip collector.)

Will be great buying opportunity as nearly all 1400 will turnover in ownership in next 10yrs.

Its happened in Fine Art; museums cant afford storage of Old Masters while Contemporary/Modern mid-centruy art is flying off walls.

Click to expand...

The cars to purchase in the next 5 years (if investing):

- 930/964/993 Porsches
- 288GTO, F40, F50, Enzo
- 80s Z28 Camaros, 90s ZR1 Corvettes, special edition Gran Am and Firebirds
- M-BMWs
- Supras
- Dodge Stealth
- Mitsubishi 3000GT
- Dodge Viper GTS
- FGT
- F 360
- Nissan Skyline
- 1st gen Miata
- Chevy trucks K1500
- Ford Broncos
- Hummer H1 - currently the best buy right now, these will be ****ing hot in about 10 years.


**Above only applies to manual transmissions, no mods and the best of the best conditions/miles.

I probably left some out but you get the picture.

Meanwhile I am waiting for those Gullwings to drop into the $500s and I am in!

Kayvan's Value (Under-Valued) list

Lotus Espirit 80s
BMW 8 Series (V12)
BMW 6 Series (80s)
Porsche 928
C3 Corvette
MB 560 SL
DeLorean
Alfa GTV6
Maserati Merak
Audi Quattro Sport
Scirocco S
Anything from Ital Design (Giorgetto Giugiaro)

Gullwings in $500-700s will be had; these old timers dont trust auctions, computers, brokers.

$ cash today not some # on a screen. Join the Gullwing Group and ask local vintage M-B mechanics...they know where they are.

Local mechanic here in LA had 6 in shop; owners trusted him like a surgeon.

Be interesting to see. I'm in my 40's. Not sure what my kids will even want in 30 years when they will be in their 40's. They love the hypercars from the video games. The love the R34 from the Fast and Furious. What this generation will want will be whatever car caught their attention from video games and movies. Every kid my age drooled over the Countach and Diablo and had a poster on their wall. I use to look in the back of Popular Mechanics to see how I could build one.

Be very interesting to see, but as Vincent said, "It seems to me that it's the old story: buy what you like and not for investment. Whatever happens, you will have had the chance to enjoy whatever it was you bought and DROVE." Anything could flop but probably the Classic Ferraris and flagship Ferraris (F40/50, Enzo, etc). I'll pass and hopefully get a NFGT one day.

Aren't 288 GTO's already solidly in 7 figures?

SBR said:

he kept stating how there was a finite supply of great cars and that more wealth was being created globally thus he felt that prices would continue to climb for many years

Click to expand...

Thats the standard realtor response

There is no certainty in 'supply' of "great buyers" or "great cars"

95% of the Forbes 400 has changed since 1980; fast money's entry nor exit is rarely orderly, in any market

Rare finds and corrected resurrections of lost/tarted/botched/modded cars are being completed daily from Bugattis in lakes to Daytonas in barns.

http://www.cnn.com/style/article/ferrari-daytona-barn-find/index.html

If we added up every rare model sports car from F 250/275/365, Cobras, to Gullwings, Miuras to 2.7 RS, Hemi Cudas, to Shelbys we would not total 100,000 cars.

Yet, a wall of 100,000s of collector cars is coming to market ever other year for next several decades.

Transparency, visibility, liquidity, low switching and transactions costs stabilize or lower prices.

2112 said:

Aren't 288 GTO's already solidly in 7 figures?

Click to expand...

A good 288 (less than 5K miles, original paint, known ownership and service) is getting between $1.8M-$2.3M depending on the former.

Two low mile, low ownership F40s just sold at Monterey for $1.5M. It's now tough to find them under $1M. DK has two with over 15K miles and both are north of $1.2M.

Enzos will keep climbing, so will the LaF.