It’s no secret that the collector car market is white hot right now. After being almost eerily quiet for the last few years, the market is in what many view as a superheated frenzy thanks to, of all things, a pandemic. But 2020 was full of surprises, and it didn’t take long for people to turn to cool cars as a much needed relief from, well, everything else that was happening that year.
We’ve covered some very strong sales in detail through all of this, and it seems not a day goes by where there isn’t a new record. You know, the ones that inspire a flurry of shocked emails between friends or generate hyperbolic social media posts all saying the same thing: “Can you believe an XYZ sold for $195,000?!? It had high miles, wasn’t really nice, and my buddy Bob saw it last year and said he wouldn’t have paid more than $32k for it!” There is no shortage of examples, from online sites such as Bring a Trailer or RM Sotheby’s new online “Open Roads” sales to, most recently, the barnburner Arizona live sales from Mecum and Barrett-Jackson.
So let’s address the big question: Are all of these buyers insane? Have they watched too many episodes of “Billions” and convinced themselves they are Bobby Axelrod? No, I don’t think so. Sure, some hammer prices are clearly the result of a few exuberant bidders, but cars don’t exist in a vacuum. Right now, after being told we couldn’t leave our houses for a while last year, many have decided they needed a new house, so the real estate market is also going crazy, the biggest seller’s market in years. Interest rates are low. Airplanes, RVs, boats, motorcycles, snowmobiles, ATVs, UTVs, and anything else that offers unrestricted enjoyment is not only in short supply but also at all time high prices. With the stock market cranking and interest rates hovering around zero, people are all too happy to live a little and buy these things.
Let’s not ignore new cars, either. Even run-of-the-mill vehicles are in high demand, and anything with a specialty or performance slant is selling at a premium. New Shelby GT500s, now in their second model year, are still selling for $30k over MSRP in some instances. The same types of premiums apply for new C8 Corvettes, new Ram 1500 TRX trucks, and even new mass-produced Escalades and Tahoes. But unlike with collector cars, one can only assume that once supply of these modern production cars catches up to demand, these premiums will evaporate.
Which is all a long-winded way to say the very strong prices for old cars as of late are not without reason. That doesn’t mean prices can’t or won’t come down—the dramatic spikes we’ve seen for some cars in the last year should be taken with a grain of salt. But would I be afraid of entering the market right now? No, not at all. Especially if you are just looking to sell a car you have and replace it with one you’ve always wanted, because I bet you have some unexpected equity in the car already in your garage. Since so much of the market is up, the delta likely hasn’t changed much between what you have and what you want. Also remember that just because one particular car sold for a huge number at auction doesn’t mean every similar one will. Because one or two sales don’t make a market, and a little legwork can still find you a great car at a non-headline worthy price, if you know where to look. Or even when something falls through the cracks at a high-profile sale because too many people assumed it would sell for too much and decided not to bid. It happens more than you’d think.
From where I sit, yes, today there seems to be a fair amount of stir crazy mixed in with a general feeling of not wanting to put life on hold any more. But if anything, that shows the underlying strength and resilience of our market—that when people find themselves craving freedom, individuality, and the ability to unplug and go back to a simpler time, many reach for the keys to a classic car.
Don’t think for a second that it’s just neophytes—or worse, speculators—driving the market activity. Take me, for instance. Of course I’m selling—two currently on BaT and nine commited to go to Mecum’s Indy sale. But I’m also buying, because I am encouraged by the overall feel and activity in the market today. Simply put, it’s exciting to trade in and out of cars when lots of other people are just as excited. And without question, the promise of a return to in-person car events is clearly fueling this type of buying and selling across the board. After all, who doesn’t want to roll into the cruise night with a new car after taking a year off?
Of course, you don’t need to do a Triple Lindy and dive in like that, either. There’s always value to being prudent, carefully researching the market and taking a wait-and-see approach. There’s also something to be said for deciding there’s no time like the present. Because “buy low sell high” are wise words to live by, but so are “you only live once.” No matter what you decide, don’t worry: The tune might change, but I don’t see the music stopping any time soon.