Barons auction results...market finally cooling?
Discussion
alsaautomotive said:
Pretty positive results at Brightwells yesterday, usual (circa 20%) unsold rate. Nothing out of the ordinary.
Were you there? Any obvious reason why the red 250CE didn't sell? I noticed the other two W114 coupes did so I'm assuming it wasn't as nice in the flesh as the photos....I had one 20 years back and it looked perfect until I tried to fit new sills at which point realised the floorpan and bulkhead were actually fibreglass reinforced with rust...
js68 said:
Were you there? Any obvious reason why the red 250CE didn't sell? I noticed the other two W114 coupes did so I'm assuming it wasn't as nice in the flesh as the photos....
I had one 20 years back and it looked perfect until I tried to fit new sills at which point realised the floorpan and bulkhead were actually fibreglass reinforced with rust...
No I didn't attend yesterday......but was keeping a close eye on the results as a couple are fairly applicable to my own hoard I had one 20 years back and it looked perfect until I tried to fit new sills at which point realised the floorpan and bulkhead were actually fibreglass reinforced with rust...
My take on the market is that the lower end (<50k cars) and the very top end (>1M cars) will remain solid. There will always be enough classic car fans to keep the <50k market busy and enough mega-millionaires to hoover up the rare high end stuff.
My concern would be classic cars in the 100k - 500k bracket, especially those which have only recently risen into this territory. This is now property value stuff, so not a purchase for the faint-hearted. It will probably need expensive specialist care and maintenance, rather than a hobby owner. If the market does stall, then I reckon this will be the price bracket that gets hit hardest. I'd struggle to sleep at night if I'd just bought one of those on finance!
One thing I also don't get is this guff about potential added demand from emerging markets. At the top end for investment, then maybe, but otherwise, no. The new middle-classes of these countries are not interested in spending big money on old cars: they aspire to a (chrome-wrapped
) Lamborghini Aventador, so would much rather put their money in to one of those, than a rusty old Aston Martin barn-find or even a concours S1 E-Type.
My concern would be classic cars in the 100k - 500k bracket, especially those which have only recently risen into this territory. This is now property value stuff, so not a purchase for the faint-hearted. It will probably need expensive specialist care and maintenance, rather than a hobby owner. If the market does stall, then I reckon this will be the price bracket that gets hit hardest. I'd struggle to sleep at night if I'd just bought one of those on finance!
One thing I also don't get is this guff about potential added demand from emerging markets. At the top end for investment, then maybe, but otherwise, no. The new middle-classes of these countries are not interested in spending big money on old cars: they aspire to a (chrome-wrapped
) Lamborghini Aventador, so would much rather put their money in to one of those, than a rusty old Aston Martin barn-find or even a concours S1 E-Type.I agree some people will be sweating a bit at the moment - but I also agree with theories that the bubble is not over yet. Despite earth seemingly calling reality, no one can really know.
A lot of those factors that have caused this perfect storm are still in place – on the financial side, ultra low interest rates and other poorly performing asset classes – and from the enthusiast’s perspective, relatively unattractive modern designs that chase figures rather than sensations.
The mix has ended up that classics are the place to go if – as an enthusiast – you want nostalgic fun with a capital upside, or, as a speculator, just stellar appreciation – and cars as an asset class have gathered a lot of steam.
However I’ve always felt that classics – whatever their level – need enthusiasts to keep them in proper condition. The cost and effort involved is simply too high otherwise.
So if valuations stop appreciating, let alone falling, owning a classic car can suddenly seem a lot less financially viable. No point in speculating (expensively) in a market that might be heading downwards.
Are things cooling now? No idea, but the maddest rush is usually right at the top of the bubble, so it is possible.
A lot of those factors that have caused this perfect storm are still in place – on the financial side, ultra low interest rates and other poorly performing asset classes – and from the enthusiast’s perspective, relatively unattractive modern designs that chase figures rather than sensations.
The mix has ended up that classics are the place to go if – as an enthusiast – you want nostalgic fun with a capital upside, or, as a speculator, just stellar appreciation – and cars as an asset class have gathered a lot of steam.
However I’ve always felt that classics – whatever their level – need enthusiasts to keep them in proper condition. The cost and effort involved is simply too high otherwise.
So if valuations stop appreciating, let alone falling, owning a classic car can suddenly seem a lot less financially viable. No point in speculating (expensively) in a market that might be heading downwards.
Are things cooling now? No idea, but the maddest rush is usually right at the top of the bubble, so it is possible.
JD2329 said:
I agree some people will be sweating a bit at the moment - but I also agree with theories that the bubble is not over yet. Despite earth seemingly calling reality, no one can really know.
A lot of those factors that have caused this perfect storm are still in place – on the financial side, ultra low interest rates and other poorly performing asset classes – and from the enthusiast’s perspective, relatively unattractive modern designs that chase figures rather than sensations.
The mix has ended up that classics are the place to go if – as an enthusiast – you want nostalgic fun with a capital upside, or, as a speculator, just stellar appreciation – and cars as an asset class have gathered a lot of steam.
However I’ve always felt that classics – whatever their level – need enthusiasts to keep them in proper condition. The cost and effort involved is simply too high otherwise.
So if valuations stop appreciating, let alone falling, owning a classic car can suddenly seem a lot less financially viable. No point in speculating (expensively) in a market that might be heading downwards.
Are things cooling now? No idea, but the maddest rush is usually right at the top of the bubble, so it is possible.
It's known as "the greater fool theory" and is very much in play right now. Essentially people will continue to buy assets they understand to be overvalued in the belief that a 'greater fool' will then pay an even higher price. The most prevalent example in recent times was the high tech bubble during the late 90's when insane amounts were invested in any venture that managed to incorporate '.com' into it's company name...A lot of those factors that have caused this perfect storm are still in place – on the financial side, ultra low interest rates and other poorly performing asset classes – and from the enthusiast’s perspective, relatively unattractive modern designs that chase figures rather than sensations.
The mix has ended up that classics are the place to go if – as an enthusiast – you want nostalgic fun with a capital upside, or, as a speculator, just stellar appreciation – and cars as an asset class have gathered a lot of steam.
However I’ve always felt that classics – whatever their level – need enthusiasts to keep them in proper condition. The cost and effort involved is simply too high otherwise.
So if valuations stop appreciating, let alone falling, owning a classic car can suddenly seem a lot less financially viable. No point in speculating (expensively) in a market that might be heading downwards.
Are things cooling now? No idea, but the maddest rush is usually right at the top of the bubble, so it is possible.
A trigger is needed really. Who knows what that will be. However, a big sell off in another market could trigger forced sales of assets such as premium classic cars. For example some car collectors who are in the oil industry will be forced to sell off assets soon by their debtors. There is already one collector in Aberdeen who is selling assets to raise capital to meet an increased deposit requirement from the banks on his business.
DonkeyApple said:
A trigger is needed really. Who knows what that will be. However, a big sell off in another market could trigger forced sales of assets such as premium classic cars. For example some car collectors who are in the oil industry will be forced to sell off assets soon by their debtors. There is already one collector in Aberdeen who is selling assets to raise capital to meet an increased deposit requirement from the banks on his business.
Funny you should mention that - I used to work for a now infamous 'energy' company whose collapse was initially triggered by margin calls caused by a decline in the share price which amongst other things was caused by the tech bubble bursting....though admittedly the other things included a very creative accounting policy...js68 said:
DonkeyApple said:
A trigger is needed really. Who knows what that will be. However, a big sell off in another market could trigger forced sales of assets such as premium classic cars. For example some car collectors who are in the oil industry will be forced to sell off assets soon by their debtors. There is already one collector in Aberdeen who is selling assets to raise capital to meet an increased deposit requirement from the banks on his business.
Funny you should mention that - I used to work for a now infamous 'energy' company whose collapse was initially triggered by margin calls caused by a decline in the share price which amongst other things was caused by the tech bubble bursting....though admittedly the other things included a very creative accounting policy...The car market could be perfectly healthy but a few forced sellers leading to low auction prices would encourage those who have bought a car purely for investment to decide to cash in, so more premium cars hit the market. Then the lenders on some of those premium cars up their margin rates and a few people can't meet or don't want to meet the call so they decide to sell and before you know it there is rout taking place.
And the fact that the classic car market has tens of specialist lenders in it and all the talk for the last few years has been of cars as investments so lots of non enthusiasts will be onboard, all meaning that it could go with a very Big Bang and very quickly.
I was a Baron's auction at Sandown Park yesterday and the market seemed to be cool tending towards frozen! My rough arithmetic at the end of auction showed about 80% not sold. Looking at the online results published today, there were a few deals struck afterwards which enhanced the results slightly to about 75% not sold. The ones which were sold were generally below estimate. A good time for a bargain Jag XJ or Roller/Bentley!
LotusOmega375D said:
My take on the market is that the lower end (<50k cars) and the very top end (>1M cars) will remain solid. There will always be enough classic car fans to keep the <50k market busy and enough mega-millionaires to hoover up the rare high end stuff.
My concern would be classic cars in the 100k - 500k bracket, especially those which have only recently risen into this territory. This is now property value stuff, so not a purchase for the faint-hearted. It will probably need expensive specialist care and maintenance, rather than a hobby owner. If the market does stall, then I reckon this will be the price bracket that gets hit hardest. I'd struggle to sleep at night if I'd just bought one of those on finance!
One thing I also don't get is this guff about potential added demand from emerging markets. At the top end for investment, then maybe, but otherwise, no. The new middle-classes of these countries are not interested in spending big money on old cars: they aspire to a (chrome-wrapped) Lamborghini Aventador, so would much rather put their money in to one of those, than a rusty old Aston Martin barn-find or even a concours S1 E-Type.
Totally agree, my area of knowledge are cosworths especially RS500s the market has stalled for them despite a number recently on the market at top dollar, where as 3drs are still racing away to close the gap. Same with Ferrari 355s the 348s are coming up and closing the gap now.My concern would be classic cars in the 100k - 500k bracket, especially those which have only recently risen into this territory. This is now property value stuff, so not a purchase for the faint-hearted. It will probably need expensive specialist care and maintenance, rather than a hobby owner. If the market does stall, then I reckon this will be the price bracket that gets hit hardest. I'd struggle to sleep at night if I'd just bought one of those on finance!
One thing I also don't get is this guff about potential added demand from emerging markets. At the top end for investment, then maybe, but otherwise, no. The new middle-classes of these countries are not interested in spending big money on old cars: they aspire to a (chrome-wrapped
) Lamborghini Aventador, so would much rather put their money in to one of those, than a rusty old Aston Martin barn-find or even a concours S1 E-Type.I would not want to be a recent buyer of an RS500 or a 355 unless it was the very pick of the crop and purchased for a sensible sum a year or so ago
MichaelDelaney said:
I was a Baron's auction at Sandown Park yesterday and the market seemed to be cool tending towards frozen! My rough arithmetic at the end of auction showed about 80% not sold. Looking at the online results published today, there were a few deals struck afterwards which enhanced the results slightly to about 75% not sold. The ones which were sold were generally below estimate. A good time for a bargain Jag XJ or Roller/Bentley!
Lordy - did they forget to open the doors???PAUL500 said:
Totally agree, my area of knowledge are cosworths especially RS500s the market has stalled for them despite a number recently on the market at top dollar, where as 3drs are still racing away to close the gap. Same with Ferrari 355s the 348s are coming up and closing the gap now.
I would not want to be a recent buyer of an RS500 or a 355 unless it was the very pick of the crop and purchased for a sensible sum a year or so ago
True. But I think they fall into that category where they are more fun to drive than anything you can buy new for a similar amount, so if you lose a few quid, you'll still enjoy them. I would not want to be a recent buyer of an RS500 or a 355 unless it was the very pick of the crop and purchased for a sensible sum a year or so ago
Looking at the lot list, the Barons sale didn't exactly have many 'real' classics; i.e. cars that are making strong money in the current market. The E-types they had both sold, but most of the cars seemed more like 'second hand' rather than actual sought after classics, i.e. old Jags, Alfa GTVs etc.
Just because the market is strong doesn't mean any 'prestige' car over 30 years old is going to make good money. IMHO of course, and I appreciate the word 'classic' is highly subjective.
Just because the market is strong doesn't mean any 'prestige' car over 30 years old is going to make good money. IMHO of course, and I appreciate the word 'classic' is highly subjective.
Edited by Claret Badger on Friday 30th October 10:00
None of the cars that failed to sell at Barons were investor material so to link the sale results to high flying investment strategy doesn't really fit IMHO.
Most of the stock was overpriced bread and butter "fodder"
It's not the first time Barons have had such a result.
http://classic-cars-winchester.co.uk/auction/baron...
Most of the stock was overpriced bread and butter "fodder"
It's not the first time Barons have had such a result.
http://classic-cars-winchester.co.uk/auction/baron...
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