Classic car market outlook 2016

Thanks for sharing. That's pretty much how I view the market as well.

 

hmm...link did not work for me. Am I missing something as it just takes me to the web page?

 

this is the direct link: WordPress ? Installation

 

Here is the text, interesting

I predicted that the classic car market would slightly weaken in 2015. Turns out I was not so wrong.

For 2016 �I thought it would be interesting to the get the views of 4 leading experts in the classic car world. Here is their opinion on the classic car market for 2016. I will submit my own views in the end.

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James Cottingham, DK Engineering – a leading Ferrari specialist in Europe:

2016: Modest expectations

For 2016 we will see some extremely rare and ultimate �blue-chip� motor cars coming out of long-term ownership; these continue to appreciate in value & break records. We have seen a number of new significant collectors joining the party over the last few years, their taste has matured and so have their ambitions! Meanwhile in the general classic car market we will continue to see strong sales but growth of these will maintain a steady/stable pace, the expectations of owners must match the market.

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Simon Kidston, leading classic car broker, judge (pebble beach) commentator (villa D’Este, Mille Miglia) and collector:

2016: The Great Unknown

More than ever in recent years, collectors, professionals and onlookers look ahead to 2016 with uncertainty and, if they’re honest, a certain trepidation. Recent world events- political and economic- have done nothing to bolster confidence and serve to remind us how quickly established and accepted wisdom can change. I expect more sellers than buyers, and some exciting opportunities. But your BS detector will be working overtime to sniff out the gems from the shrapnel…

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Marcel Massini, leading Ferrari historian and expert in vintage Ferrari:

Outlook 2016: All depends on economy and interest rates. We will see some very expensive top tier/high end Ferraris becoming available in early 2016. Only the very very best will do well, everything else is stabilizing.

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Max Girardo, MD Europe RM Sotheby’s leading auctioneer:

My view on the market is that most cars have reached what I call their�happy place. Prices are stabilizing in that I do not think that we will
see the same increases that we have seen in the last 5 years.�I see this as very positive as a market that reacts to price fluctuations
is a healthy one.

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And finally a collectors point of view:

The car auction houses have reported record sales again and some important cars have set new records. Even Kidstons Index K500 shows a 7.5% gain for the year so far. But these numbers are misleading. Look beneath it and the classic car market is clearly weakening. Let me explain.

The top end of the classic car market has held up well. Trophy cars like the Ferrari 250 SWB, the Aston Martin DB4 Zagato or rare Ferraris�(like the 290MM that just sold for $28 at RMSothebys)�have continued to sell at near record prices. But this does not make up the classic car market. The broader market has fared less well. What do I mean by that? I am talking 300SL Gullwings, roadsters, 246 Dino, Porsche 911 Targas, Porsche 356, Aston Martin DB4 and DB5 and Ferrari 275 GTBs. They have hardly shown any price growth at all for 2015.

There are several reasons why prices are stagnant.

1) Owner’s expectations. If there was one consistent theme throughout 2015, it was that the owners expectations of selling prices did not match the market prices. Owners of cars got greedy from a strong 2014 and set their price expectations very high. The auction houses did a bad job of curtailing these expectations. But since auctions houses wanted to secure good cars – they accepted the owners demands. Many cars had unrealistic expectations and buyers striked with many cars going unsold.

2) The second reason has to with diminishing returns. Prices have risen strongly over the past decade and as one expert rightly noted ‘trees do not grow to the sky. Not even for vintage Ferrari’. Sooner or later the price increases we have seen were bound to slow down.

So how I do I see the classic car market for 2016? Also how do the experts see it?

I see further weakness.�To elaborate – I don’t really see a crash coming but rather stagnant to slightly falling prices. Exceptional and rare cars will continue to hold up better than the rest of the classic car market. I personally think that many investors- collectors are leveraged to the car market. When rates start rising in the US next year this will have adverse effects on prices. Maybe not so much in 2016 but in the coming few years. Nobody wants to admit it but exceptionally low rates for so many years was an invitation for collectors, investors and speculators to leverage themselves. �

I think the party is over in the classic car world. Every year price increases of 20%+ �that is over for the time being. Its time to fasten your seat belts. For the long term collector this could be a good opportunity.

by Edmond Saran

 

Seems like all 5 opinions are cautious. Given the publication date, this was probably put together just before the interest rate increase and the latest down-leg in crude oil and gold prices this week.

 

The market will become more and more polarized. For investors it will be " buy the best, forget the rest" for trophy cars ( to be in your garage to match your Modigliani in your living room).
For mere mortals, prices will decrease slightly or more , depending of how many cars come to the market as in any case there will be less buyers in this category until prices go down massively as a GTB is not really a trophy for billionaires and too expensive as an entry piece for a normal collector ( who in any case will he afraid to take it on the road).
Good news is that real collectors who already have assets will be able to trade, exchange, consolidate with cars becoming more available and affordable. However as usual when prices are falling people will wait until prices go further down before buying, being afraid of overpaying. So correction might be steeper but people ready to trade or exchange will be able to take advantage of the situation so long they can find their counterparts.

 

I wonder how right people are about markets, I remember 12 months ago Goldman Sach's and almost every other broker were stating 200 USD oil, a year later every broker shouting 20 USD oil.. rarely do so called professional's get it right. The market is fluid and it will decide which way it is going to go.
Every one has their own personal objectives and reason's for owning a Classic and these have not changed.

 

I see the current collector car market evolving as the baseball card and comic book market did in the early-mid '90s. At that time, I was just a kid collecting cards and comics. 50s, 60s and even certain 70s comic and card prices were going crazy - just as today's cars have. Even "special release" current comics and cards of that era were jumping in price. Condition demands were vague. As long as the books and cards were bagged or sleeved it was good.

Then, things changed. Comic and card prices tanked, and they tanked fast. It seemed that collectors became more savvy. Condition became paramount. Grading became required, as apposed to "optional". The difference in pricing for the same book or card could be 50% or 80% when tenths of a point in grading are taken into consideration. Older cards and books retained their value, as did truly special or limited "modern" books and cards. But, only if graded and graded highly.

I see the car collector market moving in a similar direction. Only the best cars with complete documentation and top condition will continue to increase in value. The demands of buyers have increased. The "good" cars will not fetch the same money. That segment of the market will take the hit. So, if you aren't looking for "the best" example of a particular car, but a nicely kept example with some mileage and, perhaps, some needs, there will be some good buys to be had over the next few years, IMO. It will be an enthusiast market again for most cars, but the very best will continue to be coveted by collectors and will retain high valuations.

 

Even though I have never met him I believe everything that Edmond has to say…

This mostly is because a while back he wrote an article about the 904 GTS which prompted me to buy one (or 2 in fact) and they are awesome! Ergo he is the gospel as far as I am concerned… I'm going to hold off on any more purchases until he gives the word… Unless I see something I really like obviously…

 

Your comments are pretty close to were I see the market at the moment, I have posted before that the spread between grade A car's is around 40 -50 % today and I see this widening.
Exceptional cars will always command the top money and will always move forward, everything else is going to become a secondary market. Another recent example in the porsche market, a recent transaction of a 6000 mile 993 turbos, one owner traded through a well know specialist for 415,000 GBP, a nice 50,000 mile 4 owner car, is for sale though Octane cars for 289,000. Its the same for every car and every brand.

 

who cares where the market goes... classic cars are a collector car item bought to enjoy something from anther time... the price at purchase is important only if in budget... collector cars should be bought for pleasure... a price increase is secondary to a true car enthusiast... most collector cars are bought for some personal attachment... I don't recall ever considering a car by the bargain it represents... it is the emotional attachment that should rule any purchase... personal attachments are not swayed by market fluctions... there are many other asset classes that offer better returns and liquidity

 

Cheesey what a breath of fresh air, that is exactly my thoughts and we're when I bought my f40 17 years ago, and the same for my GTO. If only everyone could be the same then it would be just true enthusiasts that own the cars.

 

My personal view is that far too many cars offered at auction have already been offered for some years with no takes and instead of dropping prices to accurate market value accounting for condition or market dynamics they just keep trying to get what the seller considers as their price. One of the key factors in this dynamic is that there may be too many options out there, both dealers and auctions, all like a rather greedy animal needing feeding, they need consignments and ala Keno or even RM's London & Bonhams Goodwood auction have taken cars that have been available in the last year or two and offered them at even further inflated prices without success.

This touches on the market bubble thread at a certain point because of the number of buyers that are speculating rather than collecting. Collectors as mentioned above buy for love of the marque or model, speculators just jump on the bandwagon and expect to make the same % profit the last seller did. I agree with the experts above, the market will continue to fully price the unique or truly perfect, Ferrari and other, and will discount the rest. Hell, just look at the early announcements for the next few auction rounds in Arizona, Paris, Amelia Island & Monaco.....

 

It's all about finding victims.

Marcel Massini

 

Perfect terminology!!

 

+1

http://www.cnbc.com/2014/07/31/a-63-million-ferrari-is-a-fake-expert-says.html

 

Can't argue with your p.o.v. Makes me think of the early American snake oil sales men. Roll up, roll up everyone.

And any1 that would pay $63 million for a GTO from an ad like that needs their heads read.........

 

Crazier things have happened. During the arabian horse bubble I mentioned awhile back, Prices reaching millions left the owner at almost a zero chance of ever recouping through breeding or show. The record horse, a mare named Love Potion was bid up and sold for 2.5 million dollars. And ready for the kicker?

She was..... Sterile

 

Japanese speculative bubble covering everything from property to the first collector car bubble. At 1 point the total value of Tokyo real estate was valued at 25% of ALL the wealth in the whole world which was as you can imagine, unsustainable.