Classic and Collectable Cars - Bursting Bubble or a Market Correction?

10/13/2017
Richard N Hawken
We think not, markets [even cars] move in cycles of on average 4 to 6 years. The start of the last cycle can be traced back to August 2009 when you could have picked up a good low-mileage Ferrari F50 for around £400k. Today the same car will set you back around £2m, evidence the top of the market remains robust, away from the casual observer. 

The major classic car indexes recorded their peaks during auctions of Q3/Q4 2015, since then, cumulatively prices have been easing. The differentiator is good cars are falling in value, but great cars have decoupled, increasing in both demand and value. Rising prices over the last few years has brought a number of “average” cars to the market, non-matching, non-original colours, modified etc. which are then being sold at completely new auctions. This nouveaux lack of experience and quality is obscuring the data downwards as true collectors/investors are simply “passing” patiently awaiting superior metal.

Publicized sales such as the 993 GT2 which RM sold for £1.8m in late 2016 only serves to compound the issue as average cars hit auctions with increasing low reserves – which then don’t sell lowering average sell-through rates, causing concern and whispers of bursting bubbles. It’s also worth bearing in mind we have seen recent weakness in other luxury goods asset classes such as London real-estate and fine art for example.

Collectively the data points suggest middle of the road collectable cars will continue to underperform for the next 12 to 18 months or at least until “value” is once again perceived in them.
 
 
MUSTANG HAULING THE MAIL ON PIT ROAD BARBER MOTORSPORTS PARK
2015 MOMO Grand Prix Pirelli World Challenge
Porsche GT2 Racing Classic Car Store
DATSUN Z CAR THROUGH CHARLOTTES WEB BARBER MOTORSPORTS PARK
Jim Lowrey Racing Photography
Jim Lowrey Racing Photography
Jim Lowrey Racing Photography
Indy Driver Graham Rahal  #15 Indy Series  Graham Rahal
Indy Car Owner Chip Ganassi
Porsche Cayman PCA Club Racing, Porsche Cayman Road Racing, SCCA, Pirelli Challenge
VINTAGE LOTUS FORMULA HAULING MAIL ON THE TRACK
JIM LOWREY RACING PHOTOGRAPHY
ORANGE SWING FORMULA VINTAGE DRIVEN BY BOBBY RAHAL
James Hinchcliff IndyCar JIM LOWREY RACING PHOTOGRAPHY
PARNELLI JONES VINTAGE INDY CAR
Team Owner David Letterman
Winners Porsche GT3 Podium Barber Motorsports Park Birmingham Alabama
BRUNOS PORSCHE 914 ON TRACK
Paul Tracy NBC Indy Car Commentator   Paul Tracy CART Paul Tracy Former Indy Race Driver
Indy Car Racing Takuma Sato #30
Jim Lowrey Racing Photography
Jim Lowrey Racing Photography
1965 Mustang Road Racing, SCCA, Pirelli Challenge
MARLBORO VINTAGE INDY CAR
1965 Mustang Road Racing, SCCA Racing, Pirelli Challenge