We all know that the collector car world is going through a dramatic demographic shift. Enthusiasts now in their peak earning years or those beginning to retire are not the same folks who were most active 25 or 30 years ago. At a Harrah’s collection auction in 1986, the average model year of the vehicles sold was 1928.5. In 2021, the average model year of vehicles sold at a live auction was 1974.
The influx of younger buyers has, no surprise, supercharged the market for newer vehicles. Muscle cars (those of the 1960s and early 1970s) are also doing well, owing to their broad cross-generational appeal. At the other end of the market, the top five most expensive vehicles sold at auction in 2020 were prewar Bugattis. These remain valuable because, well, they’re Bugattis—exceedingly rare examples of ingenious design and engineering that appeal to well-heeled buyers of all ages.
But what about 1950s American cars—the tri-five Chevys, baby bird Thunderbirds, live-axle Vettes, and other vehicles of the immediate postwar era that for many, embody the word “classic”? You might assume that younger enthusiasts wouldn’t be major players in the market for these cars.
You’d be correct.
Millennials and Gen-Xers, who these days represent the fast-growing majority of people calling Hagerty for insurance quotes on classic cars, represent less than a third of the interest in 1950s classics. If younger collectors are clearly driving prices up in parts of the market, is the relative lack thereof having the opposite effect on 1950s classics?
This simplest answer comes from the Hagerty Price Guide, which has an index that covers 1950s American cars. Comprised of 25 of the most collectible American vehicles of the era, it hasn’t moved much since its inception in 2006. While it rebounded between 2016 and 2018, it has gradually declined since.
The index is based on price guide values, which is a helpful way to understand the market, but it is not the only way. To take a closer look at what’s happening in this segment, we’ve constructed a repeat sales index containing 2300 transactions. We’ve talked about these before in Insider but here’s a quick refresher: Repeat sales indices track specific models for which there are two or more transactions (matched by the make and VIN), providing an “apples-to-apples” glimpse of the market over time. We recently used one of these to illustrate how the market for modern collectibles is calmer than high-dollar auctions might indicate.
With 1950s American cars, it’s quite the opposite: A market that appears frozen based on price guide values is, according to the repeat sales index, vibrant and changing. (Click on chart for interactive version.)
Note the index excludes vehicles that were modified—restomods are hot right now but are in many ways a segment unto themselves. Some vehicles, however, may have been restored (partially or completely) between sales.
Comparing the blue line of the index to the jagged gray line of the moving average price—which includes cars that have sold at auction just once—we see that repeat sales performed better in the early 2000s and peaked lower in 2006-2007. Most important, since 2011, the repeat sales index has held up at a higher level than either the average sale price or our price guide values.
Zooming in on individual cars, we see some of the big jumps we’ve become accustomed to associating with cars built in the 1980s and ’90s. For instance, one pair of sales with a recent transaction is a 1957 Chevrolet Nomad that sold for $84,700 in 2017 and then sold again for $187,000 in March of 2021. Not all flips turn out so well, though: A 1957 Chevrolet Corvette 283 Fuelie sold for $258,500 in 2007, but then brought just $137,500 last month.
Of course, most cars fall somewhere between the extremes. The average annual return on a 1950s classic, per the repeat sales behind the index, is 3.3 percent. Hardly a depreciating asset.
Mind you, we’re not saying our price guide is wrong. Rather, we’re saying that it is pointing out something different. The price guide index uses some of the most desirable (and valuable) American cars from the 1950s. The median condition 2 value of its vehicle components was $102,000 in January 2021. The sales that underlie the repeat sale index and have occurred since the beginning of 2020 have a median value of just $73,862.
This price difference has implications for who is shopping for cars in this segment, because younger enthusiasts are more price sensitive. In fact, insurance quote data from the last year shows that Gen-Xers and millennials are shopping these cars at a higher rate than before. Overall, insurance quotes for 1950s American classics increased 15 percent from 2019 to 2020, outpacing growth in the rest of the market. Not bad for a supposedly stagnant segment.
Indeed, stable or even slightly falling values should not be conflated with a decline in interest in these cars. Today, insurance quote values for 1950s American classics tend to be some 20 percent more than the average for the market. If prices trend downward as older collectors leave the market, it’s likely that younger collectors will snatch them up and start the cycle over again.
Once again we see a reliance on auction figures for various cars in this story. Just remember, at these various auto auctions it only takes two bidders with a large budget to run up the price on a car well beyond what ever the best examples will sell for.
Does it say which auctions are tracked in these indices? I would think Bat has more influence at this point than the auction houses. I’m sure BaT is tracking their data- how much of it they release I have no idea.
The analysis included results from Bring a Trailer, Mecum, Cars & Bids, Barrett-Jackson, RM Sotheby’s, Gooding & Company, Worldwide, and any others that could provide a reliable price for a relevant vehicle.
I don’t rely on auction figures because I think of the Auction Winner’s Curse: You are the only person in the room who thought the car was worth the money you just paid for it. I have been in the Hobby for a long time. I buy cars through friends, I know a few attorneys who have
occasional estate sales, I buy cars sitting in carports wherein the Wife wants a Garden, any number of opportunities out there. I go to the car and put my hands on it, and look at it’s bones. So I know what I’m buying. There are some real values out there but you fhave to make the effort to find them.
In other news for Hagerties: The Impala has been sold, engine out. Along with the 327 that was supposed to go in it after Final Ceremonies for the 283 I bought the car with. It’s called getting an offer you can’t refuse. Next Month on the road again, looking around for something that catches my eye at the right price……….Blessings to all and stay well.
GOING TO BE FUN WATCHING
MONTEREY CAR AUCTIONS IN
AUGUST, LOTS OF PENT UP AMOTION AND MONEY!!!!
c U there
Look at the auction histories fro BaT auctions, there seems to be a hand-off of bidders were the early ones drop out and others enter the bidding frenzy.
The point is that it isn’t always two bidders.
When the hammer falls, it is only one bidder
meta analysis (U might call it a ‘study of studies’ as done here) is very difficult. It gets out of hand when each sub (one auction, estate, classic car local, regional or international) groups’ data is entered with the other’s. Example: look at the grouping of vehicles at the bottom of the chart for “Repeat Sale Regression Index”. I would not wish to enter them together in one statistical analysis as these are vehicles that appeal to such different kinds of buyers. First and foremost we need to ask the right Qs. Then we need to gather data narrowly targeted to answering that Q. Most of us know the ‘bubble of age’ that flows in the ‘older car’ pipeline of sales. My dad was hot on the “A” w/a lill chrome or other upgrade just off oem. I am into the late ’50’s to late 60s Italian (very few other european same decade). My son into the u.s.ofa fox (or Magnum PI look-a-likes).
What if we were to refine the search in ways that the human mind needs assistance. That aren’t as easily discernible? A poll of readers might reveal the majority’s interest and guide Hagerty keystrokes to form a different kind of info? I think ur reading public is diverse enuff to have a series of these (I’m not into rat rods or rest0mods when off oem beyond sm safety’n performance change ie DDs, another just develops pure restoration & pony, not even muscle oriented).
Thanks for what U do. I dont C many do it, or do it as COMPREHENSIVELY as U do.
Remember…..at Barrett Jackson, they come up with some funny things like “folks, this is 100% car” or “you’ll never forget what you paid”. And the worst thing to hear is “new world record” and you are it! I buy all of my cars in private sales. While auctions are a good place for car nuts to go, they are off the hook with fees (to both seller and buyer). Fun to watch old guys like me with their trophy wives bid way over the top on cars because their wife wants it. And, they put the TV cams on you, and that’s when you lose it. Not to mention, free booze (not free really) all day.
Auction prices are not a very reliable indicator of true market price. You have to consider the carnival-like entertainment atmosphere (and the juice certainly fuels emotions). I would argue it’s the private market that reflects true market valuation. Public auctions are where many record purchase prices are paid. Deep pocketed buyers simply get caught up in the pomp and circumstance and end up paying too much. When valuing cars, look at the median price range. The low and high prices only skew values. Of course, rarity and condition are key determinants as well. As you can tell, I am not a big fan of auctions but I have seen some sweet buys from time to time. It’s best to do your homework and know what you’re buying whether at auction or private. I am a caveat emptor guy and sure as hell don’t want to be the one who holds the new record high.
Classic car auto insurance rates often vary due to numerous factors including the value of the car, how often it is driven, your personal driving record, gender, credit score, and ZIP code. Classic car auto insurance policies are much more specific to you and the vehicle rather than the more one-size-fits-all approach to general auto insurance policies.