The Year in Review

We may be entering the era of instant appreciation

by Rob Sass
15 December 2021 3 min read
Image
Pre-owned examples of C8 Corvettes and other desirable cars are trading above MSRP. Wild used-car prices surely play a role, but this may indicate a larger trend. Photo by Richard Pardon

On August 14, 1988, Enzo Ferrari passed away. Like a great artist experiencing a post-mortem spike in the prices of his or her work, every car with Ferrari’s name on it was now assumed to be a blue chip investment. And not just the ones built prior to Fiat’s takeover of the road car division of Ferrari in 1971. Every Ferrari—including some of the decidedly not very special cars Ferrari was building in the late 1980s—skyrocketed in value. Mondial Spiders were selling for almost double their $76,000 MSRP, if you could get one at all. I was there. I saw it. All new Ferraris were instant collectibles. Until they weren’t. 

When the Japanese asset bubble burst in 1991, and millions of collector dollars were taken out of circulation, sanity abruptly returned to the vintage car market. Actual blue chip collectible cars like the Ferrari 275 GTB and Mercedes-Benz 300SL Gullwing saw sudden, massive decreases in value, but the hardest hit when the game of musical chairs ended were the speculators who paid well over list for the “instant collectibles.” They were left with what simply became difficult-to-move used cars. Case in point, even after 30 years of inflation, the average Mondial Spider today still struggles to break $40,000.  But with the end of the internal combustion era just over the horizon, the rules of collecting may be changing radically—the term “instant collectible” might be in for rehabilitation. 

The irrational frenzy of the late 1980s tainted for a generation the notion that a modern car—no matter how great—could be considered truly collectible. The words “instant collectible” became a shady auctioneer’s cliché, carrying all of the credibility of the pitches that cryptocurrency hustlers make when they invade the comments in your Facebook newsfeed. As a result, collectors initially shied away from truly special cars like the 2005 Ford GT, the Porsche 993 Turbo S, and the BMW Z8, all of which depreciated below their original MSRPs before rising in value in comparatively recent times. 

But collectors seem to be getting over that reluctance. The days of relying on the miracle of depreciation, and picking up a bargain on a low-production, late-model supercar are probably over. Even higher production cars like the Porsche 992 Turbo S, Alfa Romeo 4C, Corvette C8, and even the new 400 hp Nissan Z might actually never depreciate significantly, in fact, just the opposite might happen. As the end of the internal-combustion era draws to a close, there seems to be a growing appreciation for just how good, how fully developed, and how special the last ICE cars really are. It’s the kind of perspective that, in the past, took over a generation to develop.  


Depreciation? That’s so 2008

An enthusiast on a budget could once get into a supercar simply by waiting a year or two. Nowadays, the hottest cars skip “used” and go right to “collectible.”

As is usually the case, high-net-worth collectors seem to get the memo first. Case in point: When the 2016 Porsche 911 R was announced with an MSRP of $185,950, those who were willing to pay a premium of $100,000 or more to get one were pilloried by those who thought they knew better. When prices rose by another $100,000 or so, the haters simply couldn’t wait to revel in schadenfreude when the inevitable collapse in 911 R values came. The funny thing is, it never happened. Not even when the arguably better 911 GT3 Touring was announced. Today, ultra-low-mileage 911 Rs carry asking prices of $500,000 or so. The “fools” who jumped in and paid hefty premiums have clearly been vindicated.  

What many of us mistook for an ego-driven desire to jump the line and be the first to show up at cars and coffee in a special new 911 might actually have been a brilliant case of prescience, an early recognition that the rules around special new cars from the late ICE period were changing, and that just maybe, the words “instant collectible” were no longer simply hyperbole.

Rob Sass is the Editor-in-Chief of Porsche Panorama, the official publication of the Porsche Club of America. The opinions stated are his, and not necessarily those of the Club. 

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Comments

  • Stephen Abbate says:

    I’d rather drive my corvettes, that’s where the real value is.

  • Conard Galliway says:

    I have a pair of ZR1s. A 1991 and a 1993 40Th anniversary. These cars do not bring huge prices but it may be the time to sell.

  • Steve Weidert says:

    Amen to that. All the high price tagged cars only show where the money is. It DOES NOT make them a true car enthusiast.

  • KY Colonel says:

    I’ve never regretted driving a Corvette.

  • hyperv6 says:

    It all depends on the car. Sedans are dying even with big names.

  • RON says:

    Friend bought a 2022 Corvette for $75,000, drove it for 150 miles didn’t like it after 1 month. Dealer bought it back for $95,000 and has it listed for $119,900. Should have bought 2

  • Charlie Parker says:

    I have difficulty with “But with the end of the internal combustion era just over the horizon”. Hot Rods, Classic cars, etc. are a multibillion dollar industry. With all ages, around the world I might add, the love of the automobile is not just going to roll over for some plugin and wait. It’s not about any particular model, year or price. It’s about the love of American tradition, getting greasy laying on your creeper and wraping a knuckle. It is better than sex and we don’t get bitched at for our efforts…..

  • John Dennehy says:

    Good piece, except none of these are ‘vintage’ cars.

  • Ken Sousa says:

    I can’t tell you how the prices of Ford GTs, Porsche 911Rs and BMW Z8s could be less relevant to my life. These are not “enthusiast cars”, they are rich guy investor cars. What’s going on with the 60’s muscle?

  • Alexander Soultanis says:

    You have to have a love for the car, vision plus the bucks. The true enthusiast who bought it for the love of the car, while the speculators helped the price jump. In the end the enthusiast who loves the car is the big winner in my book.

  • RONALD D SIEBER says:

    Ken:
    Hagerty recently ran an article by Ken Newton (12/16) on aspects of the muscle car market. There was also another article by them before that about muscle sales, both informative.

    Rob Sass is a Porsche guy, and so he writes from that platform. That being said, the luxury sports market is also one to watch, as the bigger wallets sometimes know more than pedestrians like myself who dabble with American classics and older.

  • Richard J Russell says:

    I bought my first “ new” car in 1967- a black 65 Corvette coupe that no one wanted because it had fuel injection, optional drum brakes, heavy duty suspension and a 36 gallon fuel tank. I paid $2400,which was about half my salary,and drove the car like it was stolen for the next 3 years…summer and winter….and sold it for the same price. I upgraded to a 69 big block Vette for $2900.

    I know that the “Tankers” now sell for hundreds of thousands and I should lament not keeping the car, but it was a car, not a work of art.
    Few of the new owners would consider driving the car through a January blizzard to celebrate reaching legal drinking age.

    Old and new cars may depreciate. Buying a car and hoping that it will increase in value and not using it for fear of damage makes little sense to me….but it is not my place to tell others how to spend their money.

  • Mojunk says:

    These high prices are not helping the hobby. The little guy is getting left behind. The days of buying and building your dream car is getting washed away by greed and money grubbing dealers! I’m lucky I kept my toys even when I could have made a killing. The fun for the little guy is over.

  • Gary says:

    I have some great new cars and old hot rods. They are meant to be driven. Yes sometimes you can make money on them.
    But, driving a car and experience the joy, is what it’s all about.

  • wdb says:

    I’m not convinced that prices will remain where they are, let alone continue to rise. The pandemic relief dollars will lose impact sooner or later.

    There always have been and always will be exceptions to rules, and this article has focused on several. That doesn’t make it an industry trend.

  • Perry Yasher says:

    I just bought a CTS-V Wagon on the hopes it will retain some of its value (1 of about 1,700 made over 4 years). It keeps the 67 Corvette and 72 Chevelle Wagon company.

  • Tony G says:

    We have a loaded sublime green 2019 hellcat widebody and its now above yhe original $81k sticker! With the end in sight for the supercharged as well as all yhe hemi engines I expect it to hit $100k in the future..crazy times!

  • walter joseph king says:

    wait til this whole economic BUBBLE bursts as communist fascism takes over more and more of our government EMPLOYEES thoughts and behaviors… the great recession of 1929 – 1940 will pale in comparison… cars will become worthless, or tradable for a week’s worth of groceries eh

  • Rick L. says:

    Interesting article. But as with anything the top of any market really is not affected by the middle or lower market. Real Estate is typically untouched at the highest levels as those that can afford are not as susceptible to inflation as those in mid to lower market. 2022 will be interesting for those that are heavy in the stock market, and or real estate, which is where the money comes from for those that buy higher end vehicles or limited production. The new Corvette hype (dollarwise) is interesting as that in theory is a vehicle that is affordable by the middle class. Keep in mind that any vehicle in initial year and as significant as the new “mid-engine” Corvette is to the marque, will draw a lot of interest. And from all indications well received by enthusiasts and purists (most) as well.

  • Gary Frenkel says:

    Well said. I love all eras of cars including street rods, classics and brass era Model T’s. Thought about selling my 1910 Buick Model 16 Surrey, as all the old guys like me, who are into these types, are dying off. Changed my mind because I was offered a nice $40, 000 profit and turned it down because everything is appreciating, as long as it is in nice condition. To hell with electric, unless it is a 1912 Detroit electric. Internal combustion engines are going to be here for a long time yet and when they outlaw them I won’t be around then. Besides, I’m addicted to the sound and smell of them.

  • Indy5 says:

    “But with the end of the internal combustion era just over the horizon,”

    Rob, you give up too easily. Don’t be such a quitter.

  • Maestro1 says:

    Rob Sass is writing from a specific platform in the Hobby, not one where the rest of is live and frankly I’m surprised that Hagerty published it. It belongs in the Robb Report, Vogue, Town and Country, and so on.
    Hagerty has, and I’m around, a lot of collectors not in this market and don’t care about it. There’a a lot of complaining about how inflating prices will keep people out of the Hobby. I understand that high net worth
    people don’t care about that; they are only interested in their own world.

  • DEJ says:

    A $385,000 car in 2016 worth $500,000 in 2021 for a low mileage (and therefore unenjoyed) version is a mere 5.4% return. Investing in the stock market would have been MUCH wiser. I make this point because too many of these 911Rs and other trophy cars are sitting in a garage collecting dust so they are no better than stocks that do better over time anyway.

  • David Abel says:

    It certainly doesn’t help that C8 Corvette production is still way behind the demand curve. We’re getting ready to order a C8 convertible; and it will be mid-summer before we get delivery of the car. And I hear orders for the high performance C8 are likely to be delivered in 2023.

  • JAG says:

    Comment of “end of the ICE era”, has a horse and buggy feel. Sad to see it in a Haggerty article. You can be all about… well better get with the times… but going electric is not recoverable for the auto enthusiast. Won’t even go into the is it really better for the environment. I have old cars and new ones, and some old with modern powertrains, suspensions and brakes. The old ones are art, the new ones for transportation (even electric) and the mixed ones for sheer fun. If that is outlawed the car culture will never recover.

  • Danny C. says:

    The true value of your car is the enjoyment and pleasure of driving it, while you are on this side of the dirt. Not the dollar sign! That comes into play when you’re 6’ under. Enjoy it !!

  • Hector says:

    I had 4 Corvettes from 85 to 2019, love all of them does any body know how much is the depreciation of my 2019 Z06 2LC , thanks

    • John Wiley says:

      Good question. Based on our policy data, the 2019 Chevrolet Corvette Z06 has depreciated from an average value of $89,000 to $81,600 (-8%) from 2019 to 2021.

  • Rev. Dr. Richard Ziemer says:

    In August 1952, I devoured the article Tom McCahill wrote about R-R and finally bought a 1957 Bentley S1 RHD in 1985-86, drove it for 5 years, enjoyed it, had it well maintained, used it for family events and was told by a trustee of our church that he never knew of a Mennonite pastor who owned a R-R. B582EG has moved through other owners and won prizes at local and national events. I’m happy it was mine but is now in other hands. We don’t possess them but keep them for the next owners. It gave me an education about these cars which I wrote about in a R-R publication years ago.

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