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.
Diving a bit deeper in the impetus the virus may have on the car market, driving in a car is one of the few things that can be done that’s safe, conforms to various mandates and accepted behavior, and is fun. It is something couples or families can do together. Take a weekend drive. Go to a Cars & Coffee. Hang out in a garage with a few car friends and work on your cars or just admire and talk and have a drink.
As long as the auto manufacturers keep making all the cars look a like and crowd the market with ugly SUV’s and giant pickups the classic cars will live forever.
And the electrics in my opinion won’t be taking over the market anytime soon.
I remember being in Hersey when I was 7 (60 years ago) and my Grandfather was so mad that a Dusinburg (sp) sold for $100K. “That’s the end of the car collecting hobby” he said. Now look what they sell for. I was visiting my Dad in Laguna Beach and found a 246GT Ferrari, for $35K. That was 25 years ago, and now they are over $300K. Who knows? Been to B-J Scottsdale for 30 years. There is no end to it.
No one will like this but I think it’s a case of good old A merican self indulgence and herd lust.
I’m trying to downsize my collection, garage ,tools and parts ! I have a 79 Trans Am Smokey and the Bandit Convertible in great condition. Authenticated by Pontiac Historical . National Coach Engineering. Numbers matching. All original except has true dual exhaust with x-pipe and custom made flow masters.I also had Jet Performance rebuild original Carb to street specs. I bought the car from the original owner. About 86k mileage.
The market is robust. Demand is simply outstripping supply. Dealer inventory is at all-time lows and sales are at highs. (They would be higher if there was more to sell.) Look at the Lumber ETF, it’s all you need to see. Every asset class is parabolic. Bitcoin anyone. The world is awash in money.
All the money that normally got for travel, entertainment and restaurant dining is burning holes in folks’ pockets!
My take is that the buyers of the high dollar cars, the “true collectibles” are being purchased by (1) persons who for one reason or another already have a high dollar car to sell and (2) persons with extensive cash reserves due to the “helicopter money” economy in place today where the US Dollar is simply being inflated out of range very soon and this group of individuals is investing through collecting things of intrinsic value based on their current wealth. This includes Real Estate; Art; Gold/Silver; Bitcoin etc.; and the similar items that is felt to hold the best abilities to maintain and possibly increase the said investment in the future. Prices that are as high as was seen at B&J in Arizona are not only unrealistic but (I feel) a product of thought whereby the investing individual is speculating that their purchase will have a far higher ability at returning a higher return on their invested dollar than what the future dollar will be worth when inflation does take hold and the markets do what they always do from time to time. As is typically said who wins and who loses will only find out in time; good luck to those whom speculate regardless of your chosen commodity, I only wish I had the necessary assets to play along with you!!
Surprised no one commented on the 1965 Shelby GT350 at the recent B-J
“Be fearful when others are greedy; be greedy when others are fearful” -Warren Buffett. That said—-I always wanted a Cobra…..
I feel that the “dollar” is being so devalued requiring more money to purchase anything……. that an expected increase in the sold $ of your current vehicle will at the same time require you to spend more money on your next dream! Did you come out ahead? Or, just stay the same?
Fortunately, I like my cars and won’t be selling.
How about you?
Just back from the huge Goodguys Scottsdale Nationals Car Show at West World this weekend. Although the crowds were a little thin on Friday, it was a constant stream of people all day long on Saturday. Loads of great looking customs, hot rods and classics of all vintages. Our red-on-red 1966 Corvette convertible got plenty of attention. And best of all, the factory AC worked just great once it got going. (Nothing like driving
down the road on a warm sunny day with a cool breeze from the AC coming up from the dash!)
If anyone thinks there isn’t a large market for collector type vehicles – they need to attend one of these shows to see otherwise.
Thanks Colin, Good read!! I think you hit the nail on the head with this article. People have been looking for a release and what a better way then to get in their car of choice with a smile on their face. I know firsthand the pleasure of driving a classic car you cannot put a value on that. Besides when I see a classic car driving down the road I have never seen that person give the finger. They’re too busy enjoying themselves.
The 65 GT350 that appeared to sell for 963K at BJ’ BS auction, oh, plus 10% buyer premium? The ultimate fraud on tv. Not to be believed!
Received my 1969 Road Runner as a gift from my wife on my 72 birthday. I walk into my shop at all times of the day and night just to stare at it. Had my first RR in 1969 when I was 20, if this doesn’t speak to Damn the Torpedoes Full Speed ahead…. I don’t know what does. I am loved