Harbingers of doom rejoice, classic car prices chat thread
Discussion
northo said:
With all due respect - you city boys sure know how to complicate things! 
...
2016 has started with a bang for classic car buyers - and we aren't seeing speculators any more, it's enthusiasts. Is the market at risk? I think the only thing that is at risk here in general are speculator profit margins. In case you are wondering we do monitor the market more closely than most.... Classic car market analysis
It's a great time to be buying.
With all due respect, your viewpoint is not exactly an unbiased one....
2016 has started with a bang for classic car buyers - and we aren't seeing speculators any more, it's enthusiasts. Is the market at risk? I think the only thing that is at risk here in general are speculator profit margins. In case you are wondering we do monitor the market more closely than most.... Classic car market analysis
It's a great time to be buying.
Speaking as an enthusiast of a certain age with some cash to spend, I'd say this is absolutely not the time to buy. Over the last two years I've seen the asking prices of all my realistic dream cars suddenly spiral out of my reach after several years of market stability. I can't see why any sensible, normal buyer would enter the market right now.
Just dipped into this thread and I have to say this is all sounding very reminiscent of the 2007 housing market blowup. Both markets are/were at historically high levels but somehow stated to be a "great time to buy", that's exactly what the vested interest estate agents were saying back then, the very same people who wouldn't (and still won't) acknowledge the irrefutable truth that the housing market is heavily influenced by the availability of cheap money (as I'm convinced this market is), according to the vested interests it's purely a function of supply and demand.....
What I've personally noticed about the Classic Car market (which I haven't been too interested in for the last 15 years until recently) is that this meteoric rise in prices (my particular interest being old Jaguars) has rekindled my interest. Suddenly I feel I really want to sell what I can and buy myself a £200K+ 1961 E-type (outside locking bonnet naturally!) as I can feel the momentum of the market, I need to get in now before it's too late!
Would I be so interested if the market was stagnant or worse still took a turn. Well as I said for the last 15 years I haven't wanted to actually buy one (even though an early E-type is very alluring), so the psychology of wanting something just because everyone else is scrabbling for it and prices are rising is quite powerful I think, but when that turns I reckon my and lots of other peoples drive to sell everything to acquire a depreciating asset will evaporate, along with the 'value' of these cars.
And if people don't want to acknowledge the possibility of that happen just look back at what happened in 1989 (if you're old enough to remember), cars such as a RHD Daytona Spyder (one of seven I believe) were on the market for £2M (and that was when £2M was a lot of money for a weekend toy
). I remember seeing it at the time at Bramleys, then the market crashed big style and that car wouldn't of regained that price tag for what 25 years?
Of course it's always possible this bubble is 'different this time' lol
What I've personally noticed about the Classic Car market (which I haven't been too interested in for the last 15 years until recently) is that this meteoric rise in prices (my particular interest being old Jaguars) has rekindled my interest. Suddenly I feel I really want to sell what I can and buy myself a £200K+ 1961 E-type (outside locking bonnet naturally!) as I can feel the momentum of the market, I need to get in now before it's too late!
Would I be so interested if the market was stagnant or worse still took a turn. Well as I said for the last 15 years I haven't wanted to actually buy one (even though an early E-type is very alluring), so the psychology of wanting something just because everyone else is scrabbling for it and prices are rising is quite powerful I think, but when that turns I reckon my and lots of other peoples drive to sell everything to acquire a depreciating asset will evaporate, along with the 'value' of these cars.
And if people don't want to acknowledge the possibility of that happen just look back at what happened in 1989 (if you're old enough to remember), cars such as a RHD Daytona Spyder (one of seven I believe) were on the market for £2M (and that was when £2M was a lot of money for a weekend toy
). I remember seeing it at the time at Bramleys, then the market crashed big style and that car wouldn't of regained that price tag for what 25 years?Of course it's always possible this bubble is 'different this time' lol
Trouble is that it seems to be a double edged sword. Many cars are only viable to restore because their values have risen so spectacularly. Yet when they reach these values owners don't want to use them for fear of damaging the value.
I can see what is underpinning the normal end of the market. We have more time and money, modern cars are such completely different products to those just 30 years ago and the days of traditional driving seem to have an end that is almost in sight. At the same time, the massive boom in the number of super wealthy, huge excess of investment cash and even more speculative debt on top of that and the social prestige of owning key items is driving the top end.
But, as you allude to, we had a property crash in 2007 (only really saved by State intervention), in 2012 we had the start of the commodity crash and one has to look around at what other rapidly inflated investment markets are sitting at their peak and could be the next asset class to correct. Classic cars has to feature on that list of potentials.
My gut feeling is that this year prices won't do much and that it'll be a period of consolidation as the drivers at the lower end of the market haven't gone away but I still think there is considerable risk of a rout at present.
I can see what is underpinning the normal end of the market. We have more time and money, modern cars are such completely different products to those just 30 years ago and the days of traditional driving seem to have an end that is almost in sight. At the same time, the massive boom in the number of super wealthy, huge excess of investment cash and even more speculative debt on top of that and the social prestige of owning key items is driving the top end.
But, as you allude to, we had a property crash in 2007 (only really saved by State intervention), in 2012 we had the start of the commodity crash and one has to look around at what other rapidly inflated investment markets are sitting at their peak and could be the next asset class to correct. Classic cars has to feature on that list of potentials.
My gut feeling is that this year prices won't do much and that it'll be a period of consolidation as the drivers at the lower end of the market haven't gone away but I still think there is considerable risk of a rout at present.
Interesting link, thanks Northo for some professional input.
I think the BRICs, or more accurately the ICs are still the biggest factor.
New supercars are the ones that will get a squeeze, all these oil countries borrowing heavily where income tax has never existed. With cheap oil, there must be people in I&C creaming it just now. These people are very cultured and know that a nice classic is much cooler than new tat.
However, everyday classics will hopefully stay rooted, because they still have to be owned and find garage space. Plus sadly there is natural wastage of enthusiasts (not necessarily clog popping, just too old to bother with the faff) and the fondly remembered top brands like Alvis and Lancia become unknowns and then the focus switches to other brands.
I'm backing a steady increase in values due to limited supply and increasing demand.
Once you've paid the golf membership and mortgage, what else will you spend your fun cash on as a silver surfer/empty nester? Modern cars are ALL brilliant but terrifying to maintain, so then it is all about a lifestyle choice.
Now with lower petrol, hope we will see a few more about, not just at shows > though with the great-unwashed-car-park-dingers-proliferating (GUCPDs), maybe not.
edited for speeling
I think the BRICs, or more accurately the ICs are still the biggest factor.
New supercars are the ones that will get a squeeze, all these oil countries borrowing heavily where income tax has never existed. With cheap oil, there must be people in I&C creaming it just now. These people are very cultured and know that a nice classic is much cooler than new tat.
However, everyday classics will hopefully stay rooted, because they still have to be owned and find garage space. Plus sadly there is natural wastage of enthusiasts (not necessarily clog popping, just too old to bother with the faff) and the fondly remembered top brands like Alvis and Lancia become unknowns and then the focus switches to other brands.
I'm backing a steady increase in values due to limited supply and increasing demand.
Once you've paid the golf membership and mortgage, what else will you spend your fun cash on as a silver surfer/empty nester? Modern cars are ALL brilliant but terrifying to maintain, so then it is all about a lifestyle choice.
Now with lower petrol, hope we will see a few more about, not just at shows > though with the great-unwashed-car-park-dingers-proliferating (GUCPDs), maybe not.
edited for speeling
Edited by Hugh Jarse on Saturday 6th February 08:51
I'm with Hugh on this. Top end 'investment' cars may take a tumble but lower end, sub £100k and particularly sub £50k , will still be steady if not buoyant. With the steady attacks on pension funds and buy-to-let properties and with interest rates looking like they'll be low by historical standards for the foreseeable future where do you put some money? At least with an old car you have some fun and hopefully get most of your money back. Plus if you do make anything there is no tax to pay. Anyone who bets their pension on a classic is daft but if you have a lump of money that you don't need to live on then why not a classic?
The trouble is that this isn't how markets work. What you are describing are two wholly separate markets with no correlation. That clearly isn't the case and the two ends of the market are in strong correlation. What is more important is that it is the state of the premium end of the market that underpins the security of the conventional end.
If the top end of the market tumbles then it is absolutely inconceivable that the lower end will not also. The fall will be defined by how far assets in the market had risen.
Ergo, classics which have been overlooked like the Esprit are probably a fantastic hedge against a market collapse as their correlating fall will be tiny in contrast to the halo brands where lots of leverage, speculation and ramping have driven huge premiums.
Markets are markets and humans are humans. It is the collective behaviour of humans that defines our boom/bust cyclic behaviour and not what the particular market is. The market is irrelevant in this regard.
Lenders will never talk a market down. Neither will investors. Bears are those not in or short the market. Markets always cycle. The top end of any cycle is always defined by a loss of confidence. And once confidence is lost it is wholly irrelevant what you are holding it will be falling and the only question to ask is whether what you are holding is a volatile key driver or a casualty and whether to fold or hold. And where leverage is concerned that decision usually lies in the hands of the lender or the lender's lender more importantly.
If the top end of the market tumbles then it is absolutely inconceivable that the lower end will not also. The fall will be defined by how far assets in the market had risen.
Ergo, classics which have been overlooked like the Esprit are probably a fantastic hedge against a market collapse as their correlating fall will be tiny in contrast to the halo brands where lots of leverage, speculation and ramping have driven huge premiums.
Markets are markets and humans are humans. It is the collective behaviour of humans that defines our boom/bust cyclic behaviour and not what the particular market is. The market is irrelevant in this regard.
Lenders will never talk a market down. Neither will investors. Bears are those not in or short the market. Markets always cycle. The top end of any cycle is always defined by a loss of confidence. And once confidence is lost it is wholly irrelevant what you are holding it will be falling and the only question to ask is whether what you are holding is a volatile key driver or a casualty and whether to fold or hold. And where leverage is concerned that decision usually lies in the hands of the lender or the lender's lender more importantly.
Good stuff DA & RM, there are so many factors weaving around.
The connection between top, mid and bottom leagues is interesting.
Where the money to be made is to spot cars moving up a division perhaps.
Couple of comments on other threads about the 2001-6 R230 Mercedes, really lovely modern (neoclassic?) car and only £6-10,000. That's tempting money for the more casual punter and an anchoring force - why have a crusty wired classis when you can have a continent crusher with auto hardtop. Then there's traffic intensity and speed, who wants to break down nowadays, blooming scary. Conversely traffic density means there are very few empty roads, so to extract pleasure from a journey must be a low speed thing = drive a classic.
People borrowing to invest in cars isnt much different to leasing a modern car if you have a steady income.
At the lower end hopefully it is just spending of hard earned.
u/v most stuff from the 70's
o/v some stuff from the 60's
The connection between top, mid and bottom leagues is interesting.
Where the money to be made is to spot cars moving up a division perhaps.
Couple of comments on other threads about the 2001-6 R230 Mercedes, really lovely modern (neoclassic?) car and only £6-10,000. That's tempting money for the more casual punter and an anchoring force - why have a crusty wired classis when you can have a continent crusher with auto hardtop. Then there's traffic intensity and speed, who wants to break down nowadays, blooming scary. Conversely traffic density means there are very few empty roads, so to extract pleasure from a journey must be a low speed thing = drive a classic.
People borrowing to invest in cars isnt much different to leasing a modern car if you have a steady income.
At the lower end hopefully it is just spending of hard earned.
u/v most stuff from the 70's
o/v some stuff from the 60's
Indeed, I am talking about two different markets. For Mr. Average with a spare £20-30k the price of highly-leveraged Ferraris is pretty much irrelevant. He isn't going to borrow heavily to buy a classic and more fool him if he does. In the last big boom time, back in the 80's, I bought a Daimler SP250 for £3750. I sold it 18 months later for £10k (wish I'd kept it!). The market then crashed but SP250 values seemed to stay flat, that is they didn't lose much if anything in cash terms although they may have been a harder sell. Fast forward to 2006 and I bought a similar condition SP250 for £10250 now worth mid £20's. So if I'd held onto the original one I'd have 'lost' due to general inflation and the lost income I could have made on the £10k but have made it back again by now. The point is though that for me and many like me, that is irrelevant. The car is effectively a hobby that coincidentally is a store of value that could be cashed in if necessary. Money might be made or lost but it's not a life-changing amount of money, you at least get something back and you have the pleasure of a usable asset. Much more fun than a share certificate, though I have shares as well.
An analogy could perhaps be made with Russian and Middle-eastern money drying up and thus dampening the 'investment' property market in London. That will have little effect on the price of a semi in Nottingham. It would take a general economic depression to do that.
Having said all that, there are people spending too much on tarted-up tat at all price points, particularly models that aren't very desirable. Quality will always sell but the tat may well lose heavily. Fashions change too as different generations have the disposable cash. Look to the antique market for examples of that, brown furniture anyone?
It's a fascinating topic but in the end just buy what you like, buy the best and only use money that isn't an important amount for you. And importantly, don't expect to make money although you might if you are lucky.
An analogy could perhaps be made with Russian and Middle-eastern money drying up and thus dampening the 'investment' property market in London. That will have little effect on the price of a semi in Nottingham. It would take a general economic depression to do that.
Having said all that, there are people spending too much on tarted-up tat at all price points, particularly models that aren't very desirable. Quality will always sell but the tat may well lose heavily. Fashions change too as different generations have the disposable cash. Look to the antique market for examples of that, brown furniture anyone?
It's a fascinating topic but in the end just buy what you like, buy the best and only use money that isn't an important amount for you. And importantly, don't expect to make money although you might if you are lucky.
Edited by rovermorris999 on Saturday 6th February 09:43
swisstoni said:
There is still fun to be had in the shallows of the classic market, where the big fish don't go. Most of the cars I like are never going to go stratospheric in price but may gently appreciate due to genuine enthusiasts, not investors.
Me too but sadly even cooking stuff seems to be fetching strong money. Some gems still turn up though.There is still a lot of fun to be had in cars which are unquestionably unloved and bumping along at the bottom of their popularity and depreciation curves, and which have started to see modest but steady rises after years of being practically worthless. Just a few examples... the R129 Merc SL, normally aspirated four-cylinder Porsches, the front-drive Alfa GTV, the 205GTI too, and loads of nice old barges.
No-one's ever going to take a major hit buying a car that's 20-25 years old if it is
- either pretty or pleasant to drive or both
- obtainable in tidy and mechanically satisfactory condition for £5k or less
- has the spares and expertise back-up to make its life reasonably open-ended
- still works well as actual transport
- hasn't gone down significantly in value over the last five years
And there are bucketloads of cars like that. They're the last of the generation that talk to you through the seat and the controls, and don't constantly have computers interfering with you, while still being sufficiently safe and modern not to be an embarrassment. They're worth saving.
No-one's ever going to take a major hit buying a car that's 20-25 years old if it is
- either pretty or pleasant to drive or both
- obtainable in tidy and mechanically satisfactory condition for £5k or less
- has the spares and expertise back-up to make its life reasonably open-ended
- still works well as actual transport
- hasn't gone down significantly in value over the last five years
And there are bucketloads of cars like that. They're the last of the generation that talk to you through the seat and the controls, and don't constantly have computers interfering with you, while still being sufficiently safe and modern not to be an embarrassment. They're worth saving.
I'm not sure you can compare the market for houses (an essential) classic cars (non essential), but some interesting points made so far.
The difference between the last classic car bust and one that may/may not happen this decade:
In 1988, a 40 year old car was a split screen Minor, a Healey Hemorrhoid or some other hateful post war side valve dross. Minors and Jaguars were about the only exception. A Mark II RS2000 was a £1200 banger. New cars then were exciting - RS Cosworth, E30 M3, 325i Sport, Quattros, Intergrales etc. Even the go faster porridge such as the Cavalier SRi and MG Maestro had a bit of vim about them. Interest in cars and motorsport was probably quite a lot higher. Gatso Speed cameras? Eh?
In 2016, a 40 year old car is that RS2000, or a Capri 3.0S, a 240Z. A Mark 3 Cortina 2000E might have been pretty average when new, but how cool are they now? Modern cars, as good as they are in a functional way, are just so bloody dull with style over function and probably only BMW who are making something really nice to drive. Folk are realising that the golden age of cars has gone, never to return and this time, it's far more of a nostalgia thing combined with more disposable money that is driving the real classic car market (sub 100 grand) along. All the silly multi million quid stuff can fall on it's arse when the willy waving stops, but a nice Lotus Cortina Mark 1 will always be an appreciating 50 grand car.
The difference between the last classic car bust and one that may/may not happen this decade:
In 1988, a 40 year old car was a split screen Minor, a Healey Hemorrhoid or some other hateful post war side valve dross. Minors and Jaguars were about the only exception. A Mark II RS2000 was a £1200 banger. New cars then were exciting - RS Cosworth, E30 M3, 325i Sport, Quattros, Intergrales etc. Even the go faster porridge such as the Cavalier SRi and MG Maestro had a bit of vim about them. Interest in cars and motorsport was probably quite a lot higher. Gatso Speed cameras? Eh?
In 2016, a 40 year old car is that RS2000, or a Capri 3.0S, a 240Z. A Mark 3 Cortina 2000E might have been pretty average when new, but how cool are they now? Modern cars, as good as they are in a functional way, are just so bloody dull with style over function and probably only BMW who are making something really nice to drive. Folk are realising that the golden age of cars has gone, never to return and this time, it's far more of a nostalgia thing combined with more disposable money that is driving the real classic car market (sub 100 grand) along. All the silly multi million quid stuff can fall on it's arse when the willy waving stops, but a nice Lotus Cortina Mark 1 will always be an appreciating 50 grand car.
The point I was making about house prices in London agrees with you. These multi-million places aren't for living in, they're either for investment or to make some dodgy russian money magically clean and safe from grasping hands. The semi in Nottingham is primarily a home. If the dodgy or oil money dries up then prices fall but that has nothing to do with the real property market.
I agree with your points on the real classic market, nostalgia is the main driver. That raises the question for the long term, what will today's teenagers feel nostalgic about? Most that I'm acquainted with have little interest in cars. Still, that's a long way off, too far for me to give a toss about.
Meanwhile, up in the stratosphere.....
http://www.telegraph.co.uk/news/worldnews/europe/f...
I agree with your points on the real classic market, nostalgia is the main driver. That raises the question for the long term, what will today's teenagers feel nostalgic about? Most that I'm acquainted with have little interest in cars. Still, that's a long way off, too far for me to give a toss about.
Meanwhile, up in the stratosphere.....
http://www.telegraph.co.uk/news/worldnews/europe/f...
Edited by rovermorris999 on Saturday 6th February 16:06
At the end of the day, you need to be alert to the prices and trends of your interests. Mine as you can probably tell is Morgans, particularly three wheelers. The quantity of five speeders (the new three wheeler) for sale in the UK has caused the prices of both the two and three speeders (the old ones) to markedly dip in the UK. But auction prices in the USA seem unaffected, with cars going for considerably more than they'd fetch in the UK.
Personally, I don't expect this imbalance to last, as the sort of person who buys a five speeder would not have considered a two or three speeder.
Personally, I don't expect this imbalance to last, as the sort of person who buys a five speeder would not have considered a two or three speeder.
rovermorris999 said:
what will today's teenagers feel nostalgic about?
Play Station and masturbation I expect. You're right though - very few lads I know are interested in cars. When I was growing up and became really interested in the late seventies and eighties, there were scrapyards to be explored and cars were not the tool they are now. Buying and fixing a s
t car, learning to drive, doing ill advised mods, breaking it, fixing it with scrapyard bits again was a rite of passage.Now it's about Mummy and daddy putting a deposit down for a new Corsa. I pity todays car driving youth - they missed all the good stuff. I see a young bird* who can't be older than 20 driving a seventies Allegro now and then. That Girl's parents had the right idea.
- keep it period!
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