I was watching a preview of the Barrett Jackson auction tonight. One thing that struck me was how many "collections" were being liquidated. After Ron Pratt got out last year I'm thinking that other collectors are thinking the same way.
Well, the bloodbath in global markets is just getting worse, so it's only logical that folk would want to take profit out of their car collections.
There are 8 Dinos coming for sale in 3 Scottsdale Arizona auctions this month. I consider this venue to normally be soft for Dinos but having 8 in a weekend seems saturated to me
Of course the market has softened, and prices are drifting lower. The inflation rate since 2013 has been massive; some cooling is no bad thing. For the "Wheat", prices by the end of 2016 should still be significantly ahead of 2013. For the "Chaff", run for cover.
I agree that there will be a "move to quality" and that more rare stuff will hold out longer, but to assume that the "law of gravity" will someday be repealed is wishful thinking. Once some "big trees" start to fall it will dawn on some of these classic car "investment groups" that their asset pool is shrinking and they will liquidate, and usually quickly. Remember that a classic car isn't a chunk of gold. It decays just sitting there and it costs money to store it and to keep it from decaying. Much like buying an "older restoration" can be can of worms, keeping an automobile just sitting in a warehouse isn't good for it either. Some of the folks that are "investing" as a group will find that they are losing money every day both in terms of value and the cost of upkeep and that is a cost that a pure investor has no stomach for. At that point they bail and it all comes down.
If the market continues to slide , and or coupled with another major event similar to what happened in Paris all bets could be off. If a slow decline, very good cars will still be snapped up as some will be waiting for the opportunity. Not sure I would say the classic car market will be the first indicator of a global problem, will be a global financial problem first with car markets and other collectibles to follow. I still think we are in a stablization mode for 2016, not so much a decline.
For all you doomers out there hopeing to buy stock at a reduced rate, in to last two weeks a world record has been made on a 80's super car and another has is in the process. So as you I would like prices to come down so that I can increase my collection but at the moment anything grade A is walking out the door. Good hunting but not a lot of great stuff out there.
Please Share Forget the car market for a second. Am I the only one on here that read those two words sitting side by side and think WTF? Look again, if you don't know what I'm referring to. Pretty sure if I had a financial planner who pitched me on such an ideology, I would seriously consider whether or not to continue using his/her service. Sign of the times..
Bradwilliams, looking at your post history suggests your interest in the hobby revolves almost exclusively around talking the market down. This obsession with values as opposed to a genuine interest in the actual cars themselves is absolutely no different to the small % of owners you obviously despise that are buying with a view to making a financial gain via the market rising. A true enthusiast can find great cars to enjoy at any price point without being bitter about what they can no longer afford as it simply doesn't matter. There's always something out there to enjoy. My favourite car is the 330 GTC and I would like to buy one for my budget of £100k (and can remember when they were £40k) but those days are gone. Instead my next purchase will be a Gallardo LP560. Should this model sky rocket in value (extremely unlikely) I could find many other cars around that price that I'd love to own. Same goes for if I had £5k, £20k or £50k to spend. The pleasure you can get from the hobby has nothing to do with the size of your wallet.
I interpret Bradwilliams' posts more as urging caution at the present classic car market juncture rather than trying to influence the market down single handedly. He is merely trying to call attention to the other side of the coin. One is free to either accept or reject his point of view depending on their personal circumstances.
As the only non French specialist at Artcurial I can confirm what you said above in that we will not accept ANY cars at what we believe is too high a reserve. We are in the business in SELLING cars not doing exhibitions . I have had to say NO to so many great cars for Retromobile this year it is incredible as they sellers wanted a bit too much for their cars.. So what we have in the auction will very probably sell.. Nik Hannah
It's fascinating that we have an Artcurial representative commenting on reserves! We may never know the reserves but estimates sometimes seem aspirational. For example, you have a green Lancia Hyena (Rétromobile 2016 by Artcurial Motorcars - Sale N° 2877 - Lot N° 217 | Artcurial) at your upcoming auction with an estimate of 220-260k euro. What I believe is the very same Hyena (there aren't many green Hyenas with ~7,000km) was listed for a few months back in the fall on mobile.de with an ASKING PRICE of 169,995 euro, or 30% below the mid estimate. The mobile.de listing is gone but a Bring A Trailer piece on it is still up: One of 25: 1994 Lancia Hyena Zagato | Bring a Trailer . I think stuff like that causing people to question how realistic reserves/estimates might be...
Just a thought... we have stagflation. Huge asset inflation (bonds, art, jewelry, cars, etc) and huge commodity deflation (although for some reason I don't see my food prices going down). Here is a great summary of what has happened (is happening). Ignore the focus on gold (I'm not trying to start a gold debate here). I thought the charts and some of the thoughts would help explain the increase in Ferrari prices over the years. http://www.321gold.com/editorials/groenewegen/groenewegen011516.pdf
It's unfortunate but with the rise in electric cars, and now the talk of the self driving units, the next generation may not want or even consider a smokey old noise maker. This may very well be the last real surge in the collector car market.
Yes. The constant revisions to economic data and gaming the system is troubling. I'm surprised the financial system has been able to defy gravity for so long. One of the most interesting topic headers in the article to me read: "Negative interest rates are the ultimate form of deflation." As a small aside to the gloom and doom the article covers, I've been offered higher interest rates on renewing CDs (unsolicited) by 2 different banks so far in 2016. Although still small by historical standards, rates actually appear to be finally moving away from zero. Maybe this is a sign that things are getting ready to turn. Shorter term, if the stock market plunge continues into next week, this could chill incremental bidders at the car auctions coming up later this month.
it may be quite the opposite, if silent becomes the majority, all that smoke and noise activates the senses, allowing for increased interest vs a decline and perpetuate the interest in combustion engines, with scarcity and "no longer available" to stimulate demand...
And vinyl records have made quite a comeback in certain circles.... (I guess literally as they do go in circles!
3 years since post #1 and folks are still waiting for the major decline. If you are patient and wait long enough it may happen and then you can say "I told you so..." .....3 years later
I always think this might be the dumbest argument ever. I have two young boys and they and their friends live for all the cars on gran turismo and Forza. There is no way that electric cars change the hobby. Quartz watches keep better time that mechanical watches but Rolex doesn't seem to have gone out of business. 250 GTOs aren't less popular because they're not as good of a daily driver as a Prius. Again, we are talking about cars for car people, not appliances for the masses.
and the common mans 401k pre-crash value hasn't recovered despite the stock market more than doubling. Lots of things do not correlate even though they should or have delayed effect.
the digital watch did not take out Rolex or many other high end watch makers. Syncromesh didn't kill the crash box Fuel injection didn't kill carb'd cars values SUVs haven't killed sports cars. F1/DSG transmissions didn't kill the value on the Manuals... quite the opposite actually... We have a car culture that will continue to live on... and on... and on... As long as we don't replace our Race car drivers... we will have cars that will be driven.
One of the biggest problems with the collector car market these days is that there are more and more poorly restored cars flooding the market. As the former service and restoration manager of Canepa (I quit 3 months ago), I think I got a wider view of general market conditions than almost anyone over the five years I was there. I saw so many cars that were supposed 100 point cars that were abysmal once you got in it and took a ride. It seems like every body shop around is now restoring cars, which is great but it is only half of the equation. There are a lot of qualified body guys around that should be able to take care of the collector car fleet well into the future. The problem is on the mechanical side. Body work and mechanical work are two completely separate areas of expertise and it is highly unusual for someone to excel at both. Who is going to want to buy one of these cars if they can't drive it? The pool of qualified mechanics specializing in old cars is quickly shrinking as they retire and leave the shop due to injuries. There are very few people under the age of 40 who have replaced breaker points or even worked on a carbureted car. Even back in the day (80's and early 90's for me) there were few people who could get a car with a single carburetor running well, much less a Ferrari engine with 6 Webers. The young technicians who are coming into the market do not have the skill set required to work on these old cars. Although I have a very strong automotive technology education, most of my tuning ability came from working on them day in and day out and with many experienced 'old timers'. It's not just the drivability too, it's things like door locks working correctly, and power windows, and electrical problems, and other mechanical problems that plague old cars. There is a big difference between todays 'technicians' and yesterdays 'mechanics'. In my eyes, a technician diagnoses a problem and then replaces a module to correct a problem. A mechanic has the ability to fix things. Back in the day, you fixed things. If an alternator didn't work, you replaced its brushes or regulator or used a 'growler' to test its armature. That would never happen in a modern shop, you would replace the whole alternator. That's not to say the technicians work is not difficult, it's just that modern cars require a different business model. So in my opinion there are very few 'investment quality' cars around. Those who can properly restore a car will probably continue to stay busy as the wealthy will always want cars. I suspect the high end cars will continue to increase in value, although not nearly as quickly as they were. The less desirable cars will probably stagnate and maybe go down in value. Eventually electric cars will mean the end of the old gas burners. This will make the old cars even more valuable. But who will be around to fix them?
Great post and thank you for your insight. I know I am going to paint this with a very broad brush... but... As long as their is a demand for it... there will be a supply.
I think i heard a bang today. Oh no, wait, that is my head banging against the wall reading all the crap from people who still are worring as to what the market will, might, could, possibly be doing. No one ever could predict the market and no one will ever going forward. Everything goes up snd everything goes down. When is never absolute. Saying it will do somthing forever and then being right once in a bluemoon, does not constitute a seer/visionary. It's a little like politics, people like to hear what they believe and find support for their views.
