Mark Twain’s most famous misquote seems very appropriate in this context.
Since Monterey we’ve been hearing in the media that the froth has come off the top of the classic car market. The UK Super September auctions (as we like to call them) proved that there is still plenty of froth in the market but in general in 2016 it has been coasting along a level track rather than the roller coaster ride of 2015. Until now.
This makes for clickable headlines rather than an accurate analysis of the UK classic car market.
The Auction Results Quandary
One of the key factors influencing classic car prices and how they are perceived in general continues to be auction results. Auction results make up approximately 10% of all classic car sales and are the area where prices get most overheated – yet they tend to be taken as the benchmark for classic car prices only when they sell. So while the remaining 90% of classic and collector car transactions represent the price reality, auction results are the only figures the media can report on.
Who has been buying the “expensive” cars?
When we see cars that have languished unsold in the classifieds being snapped up at auction for more than their retail prices we always wonder why this happens. In the internet age, when a car has been for sale at a dealer for months, how on earth does it end up being sold for more at auction? We don’t have the answer, but we can tell you that invariably the best value cars are being bought by experienced enthusiasts who are more often than not dealers. Consider the knock on effect on prices.
Away from the excitement of the sale room prices tend to be more conservative and dare we say it realistic – although there is still a tier of dealers who believe pricing way over realistic market value is a sound strategy, especially when they have an official manufacturer logo above the front door.
Super September Sales.
This year the sales went well – particularly for RM [read our auction reports for more details]. What we saw is a continued appetite for the best of the best cars or those with the potential to increase in price. Froth turned to foam when RM Sothebys auctioned a selection of highly collectable modern Porsches.
The Next Big Thing
After a considered pause, buyers are looking beyond the usual suspects to find cars with appreciation potential and they are finding that potential in more modern cars. The Daytonas, F40s and E-types continue to sell for money that you might only have dreamed about 5 years ago but the search is now well and truly on for the next 288 or 250 GTO and the Super September auctions might just have released that potential – at both the top and more affordable ends of the market. The investment specials of 2015 – Ferrari Testarossa, 308, 328, 70’s Porsche and their ilk – look noticeably more affordable at auction now but the price you will pay at a dealer probably hasn’t changed much….