The depreciating values at national auctions are the same as a stock market “correction”…fortunately, the stock market generally recovers but the bulk of overvalued collectible cars probably will not…the collectible car market has been over inflated for at least a decade…driven mostly by auction buyers that have more cash than common sense…just because a split window Stingray hits 6 figures (in heated bidding) does not validate the hundreds of other split windows as worth the same…it’s the “mine too value” syndrome which is fantasy land at best…the costs of restoring a '60’s or 70’s muscle car negates a profitable sale in most cases…to survive in the “adjusted collectible car market” an investor should abide by sensible rules…“does the top go down” is a primary guideline…followed closely by rare engine options documented with matching numbers…the really rare documented cars will potential survive a reasonable tumble in value…but the customized cars including “tributes” might suffer…it is a buyer’s market currently but will these current lower values continue to depreciate?
As a financial analyst and collector of many high-end collectibles throughout the years I would posit the idea that such rapid year-over-year growth is usually unsustainable in any market what-so-ever… and rightfully so. People could be taking a breather, which would be a healthy sign the market has stabilized. Or it could be used as a forward leading indicator of buyer sentiment.
It is extremely unlikely that buyer demographics or desires have changed over a four-year period. More likely this is lockstep with the outlook many have for the economy. The economy is absolutely kicking butt right now and it is unlikely to continue at this rate based on history. It does not mean the economy will crash. It’s possible the economy could go sideways and maintain its current level. It gets into too many possible scenarios that people like me sit around in boardrooms with economists and discuss for hours. But buyer demographics have not changed in such a rapid relation to the price drops.
Value? Reliability? Performance?, Depreciated Price? Yes, several AMG V12 vehicles show exceptional ownership value but very poor collector values for some murky logic. Take the Mercedes SL 65, it can be acquired for 20-30% of original list, the car is as well built as it gets, and is arguably as reliable as the all hailed, but no faster Porsche Turbo. Maintenance is reasonable as long as you avoid MB, and the motors are very strong. If the V12 worries you go the SL 55, or CL variants. The sedans S65 is a great value as well, and will still smoke many Ferraris. Basically same V12 still used today as 15 yrs ago. Cheap V12’s ? Just a thought…
We have to face the fact that those of us who chased the cars we grew up with are aging out of the market. I first joined a national car club when I was 12 because my family had an interesting car a little older than me and I was obsessed with cars. I’ll be 60 next month and so many of the same people are still active. While there are still newcomers most of them are not much younger. We rode the wave of car collecting and are now aging out of active pursuit of our hobby. Most people in their 70’s are not starting new projects and many are divesting themselves of their collections. Generation X and younger never experienced the thrill of September new car introductions and don’t have our memories of seeing these cars when they were new.
I have been hearing about the demise of the collector car market since the 80’s. Back then people were bemoaning the fact that " kids these days are only interested in mini trucks" Well, where are mini trucks today? Young people buy and modify the cars they can afford. In the 80’s it was mini trucks, those buyers now own the muscle cars they couldn’t afford back then. Todays young people buy Hondas, Toyotas and the like because it’s what they can afford! In a few years they will be driving the Porsches, Mustangs, Camaros and the like that they can’t afford now. Tastes change as we get older and it will for them as well. Old cars have an appeal to them that cross generations which is why 32 Fords, tri 5 Chevys, Mustangs, Camaros and Corvettes are as popular today as ever and many of those buying them weren’t even born when they were built! And as I mentioned before most buyers of any age have no interest in owning collector cars. Those of us that love collector cars are and have always been a minority group. The good news is that there are more collectors than ever before and there are more cars being considered as collectable than ever. Just check out O.P.G.I.s web site, they are making parts for cars that no one ever has before. As for car prices going down, unless that economy as a hole takes a dump, collector car values will continue to go up over time even if the growth is slow.
Let me lay this out there. I’m 38 and am an officer in our club. We have 2 rules, no checkbook cars, and if you love it we will too!
I have a combined income over the top of the phone (ya I have a land line) survey between, but my budget for fun is well limited below a $30k toy budget. There are plenty in my generation into old stuff; cars, bikes, power sports, guns, stereos and everything else. We just aren’t going in debt to do it and we live expensive complicated lives with kids, businesses, mortgages (that are too big) and increasingly higher daily transportation cost. No we aren’t calling in for quotes on 40,000 muscle cars.
For the record I have a 64 galaxie 500 that is near a survivor estheticly but can drive anywhere burning tires and running 1/4s as it blows
My next acquisition will be an pre war survivor car though. Rest assured a buyer will always be available regardless of your tastes and current collection, it just has to be priced right (google knowledge sucks for the seller)
I would tend to agree with you. I can remember when the boss mustangs went from being worth very little in the late 70s/early 80s to commanding $30,000 less than a decade later. I still see some astronomical prices.
I got a '65 Galaxie as a gift. 45,000 documented miles. original Ivy Gold buckets console, terrific paint, original 289 (so it’s not gonna set a land speed record). All in great shape. I have to fix one small spot where the rear wheel house meets the trunk floor, and I need a dash pad to finish it. He landed this car for $6000. A steal compared to what they are selling for.
I like the fact that prices have dropped somewhat. No offense to those with deep pockets (if you have made your then I am happy for you and glad. It is great to see people be successful), but the auction, ego by the way of not letting jo blow outbid me type thing, etc., has helped to drive those prices up, and then down. Happened with new Harleys when the “office by day, poseur biker by night” crowd decided they wanted to look like bikers, or try to.
I think guitar74 is on to something meaning that I wonder if our demographic shift in this country is or will start effecting the value of collector cars at some point. I’m finishing up my career but work with a lot of well educated young millennials and gen Xers. One thing I have noticed is that they seem much less likely to be car guys/gals. They are more likely to be excited by a really nice racing bicycle than a Harley. Just to test I asked a group if they aspired to ever own a Harley or a vintage muscle car. I actually had to describe what a vintage muscle car was and give them examples. Typical responses were "oh yeah my Dad/Granddad/Uncle owned one of those. he talked about it all the time… shrug. As for Harleys their eyes just roll as they associate them more with middle aged executive “wild hogs” wannabes than any spirit of rebellion or individuality. I’m sure there will always be some young folks out there keeping the flame. I just wonder how many. Oh well silver lining: maybe it will allow me to afford one or two of my dream cars in my old age.
So after 30 years of kids, mortgages, schools, everything that encompasses all that great part of life it was time to finally purchase the muscle car to enjoy this time of life. It took a while, having to navigate the ads of overpriced Autos that seemed geared for first time buyers, deep wallets, etc. Found a sweet unmo!ested 1971 GTO, and I am enjoying the ride folks.
@jreisingpt, I sense that the investors are dropping out of the market for those cars and it’s a “correction” that’s not going to right itself. The only continued interest is from buyers wanting them for personal reasons…like me. There no longer enough us NOW to drive prices up (which is why investors got out) but demographics dictate our numbers will continue to shrink… i.e. we ‘boomers’ are getting older and dying off. I’m even starting to see signs that repo-parts are being discontinued and prices flattening for used and NOS on my 50’s era car.
Very interesting article and discussion here. I believe there are a couple different things going on here in terms of interest and prices on the older muscle cars and classics. First one being the insane prices some of these once “common” everyday muscle cars are (were) bringing not too long ago. The people who once owned one ‘back in the day’ were at a point in their lives that they could afford one again, so they bought one to enjoy taking it cruise nights and shows and relive their youth. Guess this include me, lol. Second being the whole “Wall Street” investment factor where guys who could afford it bought that HEMI Cuda, Yenko, or Judge convertible as an ‘investment’, NOT because they actually wanted one or even ‘enjoy’ them. But simply because it’s an investment, like any other. But now that the boomers are aging and selling off their pride and joy their does seem to be a LOT of cars on the market. I’ve noticed in quite a few of my Facebook groups that are for selling classics and muscle cars, prices on down across the board for some really nice cars. That includes six pack Mopar’s, GTO’s and big block Chevelles. Same goes for Ebay or any other online market place. But then you look at cars from the late 70’s, 80’s and early 90’s. Prices are on the upswing as guys that wanted that 77-79 T/A, Buick Grand National, ZR1 or Toyota Supra are now able to afford one. Except for the GN, GNX or 90’s Supra turbo, prices are still reasonably on those cars. Point being, the ‘younger’ crowd can’t relate to a classic muscle car as opposed to a car they grew up with. So prices will suffer on the classics in the long run IMO. I own a 87 GN myself, and love the car. Couldn’t afford one when new but was able to find a nice one in 2003 and purchased it before prices went through the roof on them.
Thanks for the response to my comments. I think we are thinking alike here. I could go into a rant about investors rather than car lovers driving the market. I have some hope that there are some younger folks developing an interest in “collector cars”, the definition of which is changing. The older cars like yours and my 50s era cars have gotten crazy costly, but the market is climbing on 80s era cars. I think there may be a number of younger people looking, and buying those cars and keeping the hobby alive. We old timers need to welcome the younger enthusiast and their “newer” (ie 80s, early 90s) cars into the fold.
I agree. I do see the 80’s cars being welcomed more and more at car shows and events. Afterall, those cars are at least 30 years old now. I myself have owned quite a few older classics including a 68 Charger, 74 Challenger, 70 Nova SS and 79 T/A. loved them all but couldn’t afford another classic Mopar so I bought my GN before the prices went up on them as it’s always been a “dream” car of mine to own …
I don’t let market value determine what classic to own and drive. That said, if you’re looking at classic cars as an investment and you don’t have the means to get a 300SL or 356, you’re better off in the long run sticking that money in an S&P500 index fund.
Remember, a car is only ‘worth’ what someone is willing to pay…
Hi howard1. My little experience with collectables is that rare collectables do not always advance as much as popularity. Some rare things do and some rare things don’t but popularity always seems to be a winner. There are thousands of cheap cars on the market from the 60’s that are bringing big money and there are thousands of each model out there for sale and they are bringing much more than many expensive cars that are only a few hundred of. And the cheap cars are bringing three times the price of the quality expensive car and which cost three times the price of the cheap car when new. Why? Its just popularity and demand. Not quality or rarity. The only good thing that comes out of this scenario is that people like me, who don’t follow fashion and popularity, and appreciate cars not by brand name or popularity but by outstanding quality, can purchase a twenty year old at ridiculous prices and these cars often offer surprisingly better true value for money than many new cars that are mostly filled with gadgets and performance that many of us will never ever use. So popularity, demand and fashion does not relate to quality and rarity or individuality. The model car I own was only produced in world wide production numbers of 203 in 1996, but that will take a very long time to be appreciated if it ever is. I also have a 1963 car that there are probably only 6 of in Australia. It is appreciated at car shows but that appreciation does not add up to monetary value.
I think I’d dispute these being as collectible as the E30 M3 down the road. Weren’t these plagued with issues? Mainly with the air bag suspension which costs a small fortune to fix? My understanding of the E30 is that it is that they generally don’t nickle and dime you to death like early 2000s Mercedes, I can see that as a huge turnoff to the general collector audience.
I have certainly not experienced what you describe. My W208 CLK55 has been very bullet proof throughout my ownership of 6 years. I have had no suspension issues at all, the engine and transmission have been just a joy. The only issue I had was the a/c needed a new compressor. Other than that, just normal maintenance.
On a side note, I owned an 1989 M3 for 9 years, and I had many more problems. I suppose it comes down to ownership history and maintenance history.
Two other things i believe are contributing. 1.) 300-400-500 hp. “Checkbook” cars are giving big money buyers all the piwer without the dirty hands or time in the garage.
2.) Wrx’s, 300zx nissans ,misutbishi Evo’s are the cars the younger generation have been “driving” in their video games for years and are within their price range.
3.) The 80’s camaros,Mustangs and Corvettes have reached classic age are plentiful and because many were daily drivers are high mileage and cheap,cheap,cheap.
I have an 83 Mustsng Gt Turbo, dealer couldnt give them away but now has come into its own at car shows simply because of its rarity and its ability to still be built with some creativity. The car is restored and im sure prices will rise. But for me its a driver not an investment. And as prices rise on the classics owners will have to hope that the dwindling buyers have the money to buy these beauties.