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 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.
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
|Lot||Description||Lower Estimate||Upper Estimate||Hammer price|
|147||Ford GT (2006)||£166,195.00||£196,412.00||£224,155.00|
|415||Ferrari 365 GTB/4 Daytona Berlinetta||£423,041.00||£543,910.00||£528,801.00|
|141||Ferrari Dino 246 GTS||£241,738.00||£302,172.00||£241,738.00|
|238||Mercedes 300SL Gullwing||£785,649.00||£966,952.00||£649,671.00|
|231||Ferrari 275 GTB||£2,266,295.00||£2,719,555.00||£2,060,028.00|
|116||Ferrari 330 GTC||£392,825.00||£453,259.00||£453,259.00|
|234||Ferrari 330 GTC||£453,259.00||£513,694.00||£562,040.00|
|151||Ferrari 330GT Series 2 2+2||£166,195.00||£226,630.00||£166,195.00|
|122||Mercedes 300SL Roadster||£543,911.00||£664,780.00||£681,400.00|
|110||Ferrari 250 GTE Series 3 2+2||£211,521.00||£256,846.00||£259,868.00|
|121||Lancia Aurelia B24S Spider America||£664,780.00||£846,084.00||£563,140.00|
|142||Jaguar E-Type S1 3.8 roadster||£226,630.00||£271,955.00||£241,738.00|
|128||Porsche 911S 2.4 Targa||£120,869.00||£151,086.00||£132,956.00|
|129||Shelby Cobra 427 (1966)||£846,084.00||£1,087,822.00||£936,735.00|
|241||Ferrari 330GT 2+2 Series 2||£166,195.00||£211,521.00||£190,154.00|
|107||Austen Healey 3000 Mk3 BJ8||£75,543.00||£90,651.00||£87,630.00|
|262||Ferrari 365GT4 2+2||£90,651.00||£120,869.00||£164,683.00|
|228||Mercedes 300SL Roadster||£785,649.00||£966,952.00||£755,431.00|
|206||Jaguar E-Type S1 4.2 roadster||£166,195.00||£196,412.00||£178,282.00|
Bonhams Auction results – Monterey 2014
|Lot||Description||Lower Estimate||Upper Estimate||Hammer price|
|272||Ford GT (2005)||£130,000.00||£160,000.00||£162,871.00|
|258||Ferrari 365 GTB/4 Daytona Berlinetta||£460,000.00||£540,000.00||£518,774.00|
|220||Ferrari Dino 246 GTS||£300,000.00||£360,000.00||£295,580.00|
|286||Mercedes 300SL Gullwing||£540,000.00||£780,000.00||£738,951.00|
|289||Ferrari 275 GTB||£1,600,000.00||£1,900,000.00||£2,111,291.00|
|264||Maserati Ghibli coupe||£210,000.00||£330,000.00||£211,129.00|
|274||Ferrari 330 GTC||£480,000.00||£570,000.00||£557,984.00|
|225||Ferrari 330GT Series 2 2+2||£190,000.00||£250,000.00||£205,096.00|
|216||Mercedes 300SL Roadster||£1,100,000.00||£1,300,000.00||£995,322.00|
|248||Ferrari 250 GTE Series 3 2+2||£30,000.00||£60,000.00||£150,806.00|
|249||Lancia Aurelia B24S Spider America||£780,000.00||£900,000.00||£603,226.00|
|251||Jaguar E-Type S1 3.8 roadster||£60,000.00||£75,000.00||£81,435.00|
|253||Porsche 911S 2.4||£90,000.00||£110,000.00||£96,516.00|
|260||Shelby Cobra 289 (1963)||£780,000.00||£900,000.00||UNSOLD – bid unavailable|
|271||Ferrari 330GT 2+2 Series 2||£120,000.00||£150,000.00||£126,677.00|
|290||Austen Healey 3000 Mk3 BJ8||£36,000.00||£48,000.00||£24,129.00|
|291||Ferrari 365GT 2+2||£120,000.00||£150,000.00||£196,048.00|
|292||Mercedes 300SL Roadster||£690,000.00||£840,000.00||£663,548.00|
|295||Jaguar E-Type S1 4.2 roadster||£60,000.00||£78,000.00||£45,241.00|
* 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”.