The collector car market is hot—but inflation is hotter

After reaching an all-time high, the Hagerty Market Rating has dropped two months in a row. The rating remains in the “rapid expansion” range; however, the dip indicates that collector cars are not immune to the forces buffeting the rest of the economy, particularly inflation.

The market rating, for those new to Insider, is our thousand-foot view of how hot collector car values are based on both in-market and external indicators.

Many of those indicators, particularly the ones that look at collector car values themselves, are at or near record highs. For instance, for the first time ever, the majority of cars are selling above their Hagerty insured values, even while insured values have increased every month for two years straight. The latest edition of the Hagerty Price Guide, released last month, recorded increases for nearly every model. Even many economic indicators rebounded slightly from last month, as the S&P 500 reversed its slump.

So why is the rating down? In a word, inflation. The monthly inflation rate hit 1.3 percent this month and is outpacing growth in the market itself. For example, the median sales price at auction increased last month, but when adjusted for inflation it's at the lowest point since October 2020.

This phenomenon is also seen in the Hagerty Price Guide. While the average and median values were up, our inflation-adjusted metrics dropped. That's true even for the most valuable vehicles. Our Blue Chip index, which tracks the values of top-tier classics, rose again last month but when adjusted for inflation is at its lowest point since 2014.

The high-end of the market will be tested this week at the Monterey auctions, where the number of seven-figure lots is 50-percent larger than past years. In recent years, sellers of top-tier cars have preferred to test the waters privately, through high-end dealers and brokers, rather than risk getting low-balled in public. Strong prices across the board in 2022 and a new all-time record for the most expensive car at $142 million seems to have increased confidence among big sellers and reversed this trend.

Expert sentiment (which we measure by asking industry insiders to rate their confidence in the market from 1-to-100) remains optimistic. Some were particularly surprised by Mecum Harrisburg earlier this month, where, as one insider noted, "It appears there is a rush to spend money before it becomes worth less."