Are the bargains back?
We’ve seen a change in the tone of the output of media organisations and classic car industry commentators over the last few months.
Classic car magazines are walking a precarious tightrope at the moment – at the same time as many of online variety are cautiously suggesting that the general growth in classic car values has slowed the printed versions are simultaneously writing of a continuously rising market and rolling out the “cars to invest in” guides which generally seem to be filled with advice from people who are selling the very same cars they are advising we buy…. But where is the evidence?
The evidence is invariably derived from auction results and this could prove to be a problem. For a start, auction sales account for around 10% of all classic car sales so can it really be taken as a representative example of the classic car market as a whole?
The second issue is that much of the comment available is “churnalism”. In this content-driven marketing environment we now live in the requirement for volume and a lack of direct connection with the industry have definitely been at the expense of quality and genuine analysis and insight. It is definitely quicker to take a quick look at the top ten cars sold and the non-sellers than look at the long term trends – mainly because it takes too much time – and a lot of the analysis is full of holes.
So – the general consensus if you open a magazine at the moment is that the market continues to rise whilst online pundits point out that auction estimates are not being hit. But who is right?
Recent auction performance
In the past few months we have had a glut of classic car auctions worldwide- – the Monterey results were impressive but not what some had anticipated and the UK Super September sales continued that trend. Overall we saw cars selling for below the inflated estimates that sellers had set their hearts on but still at healthy prices. But what of the sales since?
Bonhams – The Frederiksen Auction
With a dwindling audience for pre-war vehicles the result of this auction was always going to be tricky to predict. Pre-war cars are an area where we feel that many collectors are missing a trick – their beauty and exclusivity really set them apart from modern collectibles. The collection was a fine one and Bonhams ultimately sold 88% of the lots for £13.9 million and broke a number of records – a fine achievement according to pre-war specialist Giles Crickmay of Frank Dale & Stepsons who knows only too well the challenges of selling these types of car. 20% of the cars sold within estimate or above, but estimating the values was always going to be a devil of a job. A good result for all – view the heatmap here.
Bonhams – Zoute Sale
Bonhams sold a remarkable 40% of the lots in their Belgian auction within estimate (over 50% of the lots sold) for a 75% sell-through rate. Prices achieved reflected market values – a Ferrari 599 SA Aperta sold for an amazing £580,000 + premium totalling £666,000 although this was below the £590,000 – £880,000 estimate. The fact the owner let it go tells a story in itself. Healthy prices were paid but in some cases not quite what a heated market might have produced 12-18 months previously. Results heatmap.
H&H Duxford sale
The big story was the sale of the two Colton Ferraris. You can find more in depth analysis of the auction here. 60% of the lots were sold and this didn’t seem to raise the eyebrows of the media despite the fact that we have been getting used to expecting 75%+ sell through rates . Nor should it have as just three short years ago a 60% sell-through rate would have been considered a good result. Prices achieved reflected market values for the cars available – the very best selling noticeably better than the rest.
Silverstone Auctions – The Porsche Sale
65% sell through rate, 37% of cars sold under estimate. We felt that estimates were looking a bit more conservative than in previous sales and this was reflected by some sensible numbers for both the lots and the auction house. You can see from the infographic below that Silverstone Auctions’ performance over the last 12 months has been pretty steady.
New market phase?
Auctions are once again a truly exciting place to be. The prospect of getting a bargain at auction would have seemed like a forlorn hope a few months ago – now it looks like it might just be possible. In reality prices are still strong so bargain probably isn’t an apt description but many cars are certainly looking like better value for money and there is no doubt that you will likely get more for your money now than at any time in the last 12 months. The numbers tell us that classic cars are still selling well but not all are the eternally appreciating assets that some would have us believe – and that is good.
The last five years have been game-changing for the classic car hobby in the UK. The classic car industry and the hobby have evolved and as we enter what looks to be a new phase of the market we should accept that not everything can go up in value forever and last month’s auctions illustrate this nicely. The stakeholders involved (including the media) should be mindful of this if they value the stability and health of the market.