Data Dive

The Hagerty Market Rating is nearing hyper-appreciation

by Adam Wilcox
1 July 2022 2 min read
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In June 2022, the Hagerty Market Rating rose for the 15th consecutive month, to a new all-time high.

In the 15 years since the Hagerty Market Rating started, it’s never surpassed a score of 80, our threshold for a market experiencing “hyper appreciation.” But, after 15 consecutive months of growth following a 9-and-a-half-year low at the beginning of the pandemic, the Hagerty Market Rating is at a new all-time high of 78.22 and knocking on that door.

After the absolute feeding frenzy during the last year, many would assume that the Market Rating would have already hit "hyper appreciation." But our Market Rating is designed to help us see the big picture rather than reacting to a few big sales. It derives from more than a dozen components, including auctions but also Hagerty Price Guide values, insurance data, and economic indicators. Last but not least, the algorithm behind the Market Rating tends to pull the value toward the middle (50) and away from the extremes. That may sound arbitrary but is actually based on fundamental statistics: In any large dataset, most samples cluster around the middle. For example, it's possible for a basketball player to hit ten 3 pointers in a row, but over the course of a season, they will likely regress toward the mean. In the collector car market, we assume the most likely scenario is a market that is essentially flat.

All of which makes this 15-month hot streak unprecedented. It started when the Market Rating was already near 60, and fought the algorithm's desire for balance the entire time, never reversing course.

However, there are some signs that the run could be coming to an end. As the stock market continues to slump, our macroeconomic indicators used in the Market Rating dropped to their lowest point in over a year. While still high, the economy is showing signs of a continued downward trend.

Economic uncertainty, among other factors, has begun to effect the classic car market. Classic car sales through auctions and between private parties are slowing, although there still appears to be an appetite at the ultra-high-end, as the $142M sale of a Mercedes-Benz 300 SLR Uhlenhaut Coupe indicates.

Owner sentiment likewise remains strong. The ratio of insured value increases to decreases in Hagerty's book of business grew for the 20th consecutive month, with the largest growth coming from the affordable end of the market.

Once affordable classics like the 1965 Ford Mustang GT have appreciated wildly in the past few years. (Photo by Aaron McKenzie)

Indeed, the cheap classic car is quickly becoming a thing of the past. The average value of the one-hundred most insured vehicles in the Hagerty Price Guide—another component of the Market Rating—rose again to a new all-time high. To put this market growth into perspective, just look at our Affordable Classics Index.

Our next Market Rating update, for July, will be a critical one, as it will gauge the market before we head into Monterey Car Week. Stay tuned. For more detail on how the Market Rating works, read here.

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Comments

  • Ron Sanderson says:

    All this market hype by Hagerty should make one cautious about the collector car market.

  • Joe Maggio says:

    How about reviewing COPO cars

  • Rick McCarty says:

    If I don’t sell it then all of the hype doesn’t matter.

  • Joe says:

    Affect, not effect.

  • Mark Luichinger says:

    So at 78.22 are we at 2 std deviations and about to touch 3std deviations? Meaning approximately 94% of all the money has been squeezed out of the market? Or only approximately 6% “ chance the market goes higher? Just asking. Money Ball” for cars!

  • John Burke III says:

    I am glad I have the memories of wrenching on cars I have owned to the 70’s and 80’s. Very little was exotic to myself or friends and you could easily save up for the bolt on parts to make your car a performer if you could not afford the high end performance cars. In a change of times I see so many exotics and high end cars at the local car gatherings. While it is nice to see the younger generations interest I also see a lot of them now never being able to afford entering the hobby unless they purchase the current cars off of the dealers lot such as Mustangs, Challengers, Camaros and Chargers. I wonder where all these cars that are owned but my greying generation will go to when we can no longer enjoy them.

  • Maestro1 says:

    The hysteria you describe as you know has also affected the housing market, groceries, gasoline, and everything else. I have been telling my collector friends for months that there will be a correction in the market that may be less traumatic to us than in other areas. If you buy now you are close to or at the top of the market. Bad idea. That’s an opinion, not fact.

  • MICHAEL COSGROVE says:

    I think increased interest rates will definitely put a clamp on things. I’ve totally been taking advantage of them over the last couple years with all of my car purchases, so I won’t be buying anything in the near future on credit with these increases.

  • srg says:

    Let’s see…..what does Hagarty do? Oh, they insure classic cars based on their value.

  • Frank Blau says:

    Oops!! Putting a GT gas cap on that ‘65 does NOT make it a GT!! Surely you have a nice picture of a real GT somewhere in your files!!

  • John Burke III says:

    I was looking for a 65 or 66 6 cylinder auto Mustang for my twins. Something with high mileage and unmolested. In my lifetime I have never witnessed prices climbing as rapidly as they have in the last two years. I have always had time to painstakingly search out those cars on my bucket list. This is crazy the frenzy of those wildly buying cars right now and pushing prices up. People are flipping junk and they are getting bought rapidly. I am also in the group that thinks this can’t sustain these prices. I would be very interested for Hagerty to run a report on demographics and give us the percentages of ages of those insured by Hagerty. Not quite sure what you ladies and gents are seeing but more and more at the shows I attend us old guys are the majority owners of these classics!

  • Garry Scutt says:

    I understand the skepticism about rising prices on old cars such as a 6 cylinder 65-67 Mustang, but I think the thing that we may be missing is that these cars (which many of us now remember when new) are approaching 60 years old. And their numbers – in terms of availability now – are rapidly decreasing as they head to junkyards (ouch) or already scooped up by collectors/enthusiasts. I think we are going to see those once very familiar and numerous 1960s and 1970s cars to become highly sought after in the next 5 10 years and that impact on their value will only be positive. Hopefully, for those of us who love cars and these old ones, sanity will prevail and gasoline will not become $10 a gallon or illegal in our lifetimes. I have two sixties era Fords and an 30+ year old Cadillac and I love all of them and while not interested in selling, I do understand that they are worth a lot more now than just 5 years ago.

  • Greg J McDowell says:

    Why mention a Mustang Gt and show a non Gt in the picture implying it was a GT?

  • martin sheraga says:

    I have 2 Classics in my garage, wife parks in the driveway. This hobby has been what defines me these last 45 years, however I am seriously thinking of being done with it, and just doing something else. It used to be fun. It used to be affordable. It never was about the money. My current cars weren’t expensive, but they are getting there. I once had a car so valuable, I was afraid of it, I sold it. Things were fun again. I am sure others feel like me. One thing I’ve learned in life… everything ends up being about the money. It’s a shame. I feel sorry for the young people and those with lower budgets, priced out of the market.

  • Larry D Brooks says:

    With a half million Mustangs being made in 1965, I believe it’s a buyer’s market on these cars. If you don’t like the high price one seller has, just move on to the next car. Simple. You know the old saying about more than one fish in the sea? Well, there’s more than one horse in the barn.

  • Burt Harwood says:

    May ’67 =bot 66 Mustang GT cpe 6R07A169929 for $2275 from 1st owner & still have with over 20 1st place trophies. Insured for $40000 by Hagerty. “Hold fast to that which is good.”

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