As with the stock market, shifts in government can affect collectibles of all kinds. The classic car market, as anyone trying to buy an air-cooled Porsche 911 knows, has been on a near-unstoppable tear of late, but the times, they are a-changing. We spoke to Jonathan Klinger of Hagerty Insurance, on the ground at the auctions in Arizona.
“To give you some idea of the atmosphere here,” he said, “A guy just walked past with three foot-long corn dogs.”
Barrett-Jackson is the largest and most famous of the half-dozen auctions held this time of year in Arizona, and it's a bit of a circus. Unseasonably cold weather kept attendance in check, but an increase in the number of cars being offered and sold made up for a softening at the top of the market.
Ordinarily, auction results are carried by the headliners—classic Ferraris and the like that fetch millions of dollars. “A racing Ferrari from the '50s or '60s is still the holy grail for collectors,” Klinger said, “And I don't see that changing.”
However, the most expensive car sold over the weekend was a 1963 Jaguar E-Type Lightweight, a racing special that fetched $7.37 million. But even this was slightly less than expected, a trend that continued throughout the various auctions: average sale prices were up, but cars were missing their targets. A 1960 Ferrari 250 SWB Spider, one of the aforementioned holy grail cars, went unsold, with multi-million-dollar bids not quite making the reserve.
Further down the list, in the blue-chip car segment, a further softening of the market caused average sale prices to drop off by 12 percent. “We're seeing a plateau,” Klinger said, “As the huge growth of the past few years levels off. I wouldn't say it's peaking, but the huge increase in values wasn't sustainable.”
Blue chip cars are icons like the “Gullwing” Mercedes-Benz 300SL and Shelby GT350. These will always be popular, and Klinger points out a silver lining in values levelling off. “I think we'll be less likely to see speculators getting involved,” he said, “Air-cooled 911s, for instance, are still expensive, but there's more discernment. Buyers are willing to pay, but only for a good one.”
There's further good news for classic car fans, particularly at the sub-$100,000 end of the market, where an increase in volume saw total auction values hit $259.8 million, the second biggest week ever. Minor changes saw General Motors vehicles performing at or below their market level; and an increase in Mopar values as Dodge, Plymouth, and Chrysler muscle cars start looking like good value.
But what's really interesting is the burgeoning truck market. “A rare 1972 GMC factory crewcab hit $90,000,” Klinger says, “And we're seeing strong performance from this segment.” 1940s Dodge Power Wagons also performed well, nearly cracking the $100,000 barrier, and there was plenty of interest in Ford F-Series pickups and Broncos. Increasing values mean these cars will be preserved and restored.
More good news comes with the much-talked-about millennial buyer. Klinger indicated that 2017 is the year Hagerty Insurance predicts the millennial market will surpass the baby boomer, and that means further shifts in the classic car world. “Everyone's so busy,” said Klinger, “People are willing to write a cheque for a properly restored car.” Good news if you're in the restoration business.
Further good news is that many of tomorrow's future classics are still attainable. Take, for instance, a baby-boomer classic like the 21-window VW van. Over the weekend, a perfect restoration fetched an insane $302,500, far outside the reach of your average collector. But at the same time, a flawless 1989 Nissan GT-R fetched $60,500. Just a few years ago, Canadian buyers were able to import these for about a third the price, but they're still within the reach of those who grew up racing them in Gran Turismo.
Looking to the future, cars like the Mazda RX-7 twin-turbo, E46-chassis BMW M3, and Corvette Z06 will continue to grow in value. Whatever's happening in the political sphere, the news from Arizona should be cheering to classic car fans. The market is strong at the affordable end, where it matters. Some of the feeding-frenzy craziness, like that around air-cooled Porsche 911s, seems to be levelling off. And, best of all, the coming generation is still interested in buying and preserving the cars they love.
