Are classic car values still going up?

Are classic car values still going up?
27th August 2014 Rob Johnson

Are classic car values still going up?

Are classic car values going up or has the market topped out? It’s the £4 billion question that many are asking but few have the answer to. 

There is no doubt that  classic car values are currently in good health and we’ve written about the state of the 2014 classic car market on several occasions already this year. In February we took a look at classic car values and where we expected them to go in 2014. If you look at the classifieds, read classic car magazines or listen to the mainstream media then the general consensus is that values still continue skywards unabated. But are we looking at the right signals?

 

Price vs Value

Prices are rising faster than values. We have seen the asking prices of vehicles rise more sharply than the transaction price (the value – in most cases at least). The proliferation of the three letters that all buyers dread – POA – on classic car sales portals and dealer websites is evidence of an over excitable market where sellers won’t give a price until they have qualified the buyer. For Price on Application read Proceed With Caution.

 

Classic cars in the media

Talk about classic car values has exploded globally in the media in 2014. At Classic and Sports Finance we monitor these online signals daily and there has been a significant increase in media activity related to classic car auctions, classic car values and classic car investment and we see this activity across both mainstream and financial media. Media interest tends to focus on high values for classic cars (typically results achieved at auction) and, in the financial media, investment potential. There are two issues with this type of publicity. Firstly, it is mainly driven by auction houses who of course have a vested interest in values going up and their PR teams work hard to assure sellers they will get a good result. Secondly, if the mainstream media are talking about it you can safely assume the car is out of the bag and speculators will enter the market.

Classic cars for sale

It’s still a sellers market and there is definitely a trend for some of them to price their cars spectacularly high and hope for the best in some areas of the market. Certain Porsche models have been particularly prone to this and prices have been increasing, in some cases weekly. No doubt some of these highly prices cars will find buyers, but it’s always worth remembering that if you see a car advertised it means it hasn’t been sold! Some extremely high pressure sales tactics are being employed by some sellers – typically the higher the pressure the longer the car has been in stock……

Auction results

Auction results have long been the  staple means of interested parties accessing vehicle sales prices. However, the majority of classic vehicles sales are not made at auction and these transaction prices remain confidential meaning that many have to rely on auction results or dealers prices as a yardstick for value and both are unreliable.

We took a close look at the results from this year’s Monterey Auction results to see if we could identify any trends. We ignored the really big ticket sales (of which there were some amazing results) and concentrated on a smaller selection of the core vehicles our customers buy  through us. We also looked at a selection of similar vehicles to give a comparison.

 

Key:

Lower estimate in red – lot was bid to lower half of estimate

Upper estimate in green – lot was bid to upper half of estimate

Hammer price in red – Sold for less than estimated

Hammer price in green – Sold for more than estimated

 

RM Auction results – Monterey 2014

LotDescriptionLower EstimateUpper EstimateHammer price
147Ford GT (2006)£166,195.00£196,412.00£224,155.00
415Ferrari 365 GTB/4 Daytona Berlinetta£423,041.00£543,910.00£528,801.00
141Ferrari Dino 246 GTS£241,738.00£302,172.00£241,738.00
238Mercedes 300SL Gullwing£785,649.00£966,952.00£649,671.00
231Ferrari 275 GTB£2,266,295.00£2,719,555.00£2,060,028.00
116Ferrari 330 GTC£392,825.00£453,259.00£453,259.00
234Ferrari 330 GTC£453,259.00£513,694.00£562,040.00
151Ferrari 330GT Series 2 2+2£166,195.00£226,630.00£166,195.00
122Mercedes 300SL Roadster£543,911.00£664,780.00£681,400.00
203Mercedes 190SL£84,608.00£108,782.00£78,565.00
110Ferrari 250 GTE Series 3 2+2£211,521.00£256,846.00£259,868.00
121Lancia Aurelia B24S Spider America£664,780.00£846,084.00£563,140.00
142Jaguar E-Type S1 3.8 roadster£226,630.00£271,955.00£241,738.00
128Porsche 911S 2.4 Targa£120,869.00£151,086.00£132,956.00
129Shelby Cobra 427 (1966)£846,084.00£1,087,822.00£936,735.00
241Ferrari 330GT 2+2 Series 2£166,195.00£211,521.00£190,154.00
210AC Aceca£75,543.00£105,760.00£157,130.00
107Austen Healey 3000 Mk3 BJ8£75,543.00£90,651.00£87,630.00
262Ferrari 365GT4 2+2£90,651.00£120,869.00£164,683.00
228Mercedes 300SL Roadster£785,649.00£966,952.00£755,431.00
206Jaguar E-Type S1 4.2 roadster£166,195.00£196,412.00£178,282.00
 Total£8,953,376.00£11,002,104.00£9,313,840.00

Bonhams Auction results – Monterey 2014

LotDescriptionLower EstimateUpper EstimateHammer price
272Ford GT (2005)£130,000.00£160,000.00£162,871.00
258Ferrari 365 GTB/4 Daytona Berlinetta£460,000.00£540,000.00£518,774.00
220Ferrari Dino 246 GTS£300,000.00£360,000.00£295,580.00
286Mercedes 300SL Gullwing£540,000.00£780,000.00£738,951.00
289Ferrari 275 GTB£1,600,000.00£1,900,000.00£2,111,291.00
264Maserati Ghibli coupe£210,000.00£330,000.00£211,129.00
274Ferrari 330 GTC£480,000.00£570,000.00£557,984.00
225Ferrari 330GT Series 2 2+2£190,000.00£250,000.00£205,096.00
216Mercedes 300SL Roadster£1,100,000.00£1,300,000.00£995,322.00
236Mercedes 190SL£42,000.00£54,000.00£42,225.00
248Ferrari 250 GTE Series 3 2+2£30,000.00£60,000.00£150,806.00
249Lancia Aurelia B24S Spider America£780,000.00£900,000.00£603,226.00
251Jaguar E-Type S1 3.8 roadster£60,000.00£75,000.00£81,435.00
253Porsche 911S 2.4£90,000.00£110,000.00£96,516.00
260Shelby Cobra 289 (1963)£780,000.00£900,000.00UNSOLD – bid unavailable
271Ferrari 330GT 2+2 Series 2£120,000.00£150,000.00£126,677.00
273AC Aceca£190,000.00£220,000.00£153,822.00
290Austen Healey 3000 Mk3 BJ8£36,000.00£48,000.00£24,129.00
291Ferrari 365GT 2+2£120,000.00£150,000.00£196,048.00
292Mercedes 300SL Roadster£690,000.00£840,000.00£663,548.00
295Jaguar E-Type S1 4.2 roadster£60,000.00£78,000.00£45,241.00
 Total£8,008,000.00£9,775,000.00£7,980,671.00

* Both Bonhams and RM Auctions provide estimates (which do not include the buyers premium) and selling price (which does include the buyers premium). Here we have referred to the Hammer price – the selling price without buyers premium. Typically sales prices are reported in the media with buyers premium.

 

So, what can we learn from all these figures?

A lot has been made of the world record prices, the collectors cars and the increase in the value of metal sold. A quick look at the above figures tells us that from that selection the cars didn’t perform as quite well as expected compared to the estimated values. The dynamic of having so many vehicles for sale at one location over one weekend is too complex for anything other than a sticking a finger in air and relying on a hunch. The media went into Monterey Week with predictions of $70 million+ for the Ferrari 250 GTO and it failed to make that mark – and many other important and desirable cars sold at significantly less than was expected.  It’s interesting then that the media buzz surrounding the auctions still focuses on the records and the total values achieved, but it’s certainly not surprising.

“Collectors showed discipline in their bidding and were willing to let some cars pass rather than be drawn into a frenzy. The Blue Chip collector is a sophisticated buyer and they proved this this year in Monterey.”

“There was a great deal of hype heading into the Monterey auctions. On the surface it was a record year and several individual record sales were set — including the highest price ever paid for a car at public auction.”

McKeel Hagerty in the LA Times

 

The Neutral Perspective

Our view on classic car values is formulated by two main influencing factors – customer desire and historical transactional data. Classic and Sports Finance are in the unique position of handling many hundreds of classic car sales transactions every year which means we know what prices are being achieved for vehicles through dealer, auction and private sales. We also gauge and monitor customer interest through volumes of enquiries and web traffic as well as which cars are desirable – and as we deal with a large network of preferred dealers we have no specific affiliation to any particular era, marque or model of car. We also have a duty of care to our customers, our banking funding partners and our dealers to ensure the sales price suits all parties.

At the moment, interest in classic car finance and owning a classic car is as high as it has ever been. In terms of values, buyers are becoming better educated and more sophisticated and that means they are less willing to buy cars that are too highly priced. We see that in many but not all areas of the classic car market values are beginning to cool – and this is a good thing. There are more than enough buyers to support healthy values and many ongoing sales, but the values can’t and won’t continue to rise for ever. Our advice – “Buy well”.