Buyer optimism, a healthy economy and a generous supply of vehicles are keeping the classics and collectibles market in high gear.
John Crispeno, Manheim Pennsylvania marketing manager, said it is a buyers’ market for classic cars at the auction.
Sellers had the upper hand from 2012 to 2015, “with big gains,” but pre-election doubts drove the prices down last year and they are remaining steady.
The economy has a “huge effect” on the classics market, Kinney says. For many, these (purchases) are indulgences.
Some high-line car purchases are like fashion accessories: what’s “in” comes and goes. Others with deep pockets purchase vehicles as investments.
Those with more modest bank accounts may be more cautious, trading by the old saying don’t spend more than you can afford to lose.
Demographics will play a big role in the future of collectibles. Like most businesses, the classic car market needs to attract younger buyers to keep the hobby relevant.
Barrett-Jackson, the Scottsdale, Ariz., auction long associated with a January mega-sale of collector cars, said it sold 630 vehicles in Connecticut in June for $23.4 million. Customers included younger buyers and tastes ran to collector pickup trucks and “custom vehicles professionally restored or modified,” the company said in a press release.
Millennials and Gen-Xers appear to be attending its auctions in greater numbers, the company says. And two young teens, working with a parent, rebuilt a Bandit Trans Am and sold it at the auction.
While interest in and prices for American cars from the 1950s are flat, and European make values generally are not increasing, muscle cars have recovered from their post-recession doldrums and are in great demand, according to recent Hagerty valuation reports.
“Sales of muscle cars from the ’60s through the ’80s are very active,” said Dave Kinney, publisher of the Hagerty Price Guide. “Younger baby boomers are buying them.”
The Manheim Riverside, Calif. auction began selling classics and collectibles in 2016 and is now hosting a monthly classic/muscle car sale through 2017, says Manheim spokeswoman Jennifer Sheran.
Broad dealer interest shows that consumers still want the classics, she says.
Each Manheim auction determines its interest level in classics sales, Sheran said.
Mark Ford, Manheim’s regional vice president for the Southeast, warns that classic cars are not for all dealers.
“It is a big investment for a niche market, so it is not the right inventory choice for just any dealer,” Ford says. “You have to be an expert if you are buying a classic car to truly understand what you are getting.”
In an economic downturn or period of slow growth used-car dealers may be able to take advantage of reduced prices on collectible vehicles, Kinney said.
“Having a few classics on the lot can be a good draw,” he said.
Consignment dealer Gateway Classics in Dearborn, Mich. is having a banner year. Among the 75 vehicles in its expansive showroom in June was a 1935 Ford roadster with 85-horsepower flathead V-8 priced at $70,000. A 2010 Corvette ZR-1 with supercharged 6.2-liter L59 V-8 had an asking price of $95,000.
“Beginning in January the market has been very strong,“ says Tony Saif. Gateway, with headquarters in Illinois and operations in 10 states, claims to be the world’s largest classic car company.
Figuring a price with the seller is tricky, Saif said.
“It’s hard to separate pride and price,” he said.
Saif says one of the most surprising transactions in recent months was a 1950 Dodge Power Wagon, completely restored with updated engine. It sold for $145,000.
Competition for vehicles remains stiff, although sale results are mercurial.
Gooding & Company, a California-based company that sells at the three top venues for classics sales, reported sales of $43 million at Scottsdale in 2016 and $33.4 million at this year’s January event. RM Sotheby’s totals in Arizona were $62.8 million in 2016 and $53.8 million in 2017.
At Amelia Island off the coast of Florida, Gooding sold $60.2 million in 2016 and dropped to $30.6 million in 2017. RM Sotheby’s reported sales of $38.6 million at Amelia in 2016 and 79.9 million this year.
Part of the success of the 2017 RM Amelia sale was the addition of a private collection that was offered at no reserve. RM boosted its Monterey, 2016 sale in the same manner, hosting a pre-sale auction of a private collection.
Some auctions use classic cars as a way to do more than make money for themselves.
ADESA Boston recently hosted its 17th annual classic car show and motorcycle run raised $17,300 through a live auction, show entry fees and sponsorships. All proceeds benefit JDRF, a leading advocacy group for people with type 1 diabetes.