Classic car bubble?

[V8RX7]

Welshbeef said:

V8RX7 said:

jonah35 said:

People forget in 2008/9 you couldn't give cars away.

I'll agree they dipped for around a year but there are always buyers - I bought my wife her most expensive car to date in 2009 - we needed a better car so I bought it - expecting it to drop in value but that didn't matter as we wanted to use it, rather than sell it.

Was that the dodge Suburu or MX-5?

XC90 - it turns out they're cr@p and was the most problematic car I've ever owned (and I've had 5 TVRs) so we sold it a year later for a profit when everyone realised the world wasn't going to end after all.

[DonkeyApple]

BlackLabel said:

Now that we're into 2016 how are prices holding up?

A quick glance over the PH classified section and prices appear to be as high as ever.

Prices don't seem to have moved but stock is still slower to shift.

I think there are two factors to focus on this year. On the macro side the continued rebasing of the speculative commodity bubble and the oil war between Saudi and the US is collecting more and more scalps each week. LTVs on classic cars has been rising and lenders are already forcing the handof some collectors to be reducing stock so as to raise their margins. So we are at considerable risk at present of forced sellers growing and creating a tipping point.

On the local, micro side, almost everything seems to be on hold until the April budget. The U.K. Investment market is waiting to learn whether pensions will still exist in any viable format for high earners, what exactly the additional property taxes will be, whether there will be additional raids on investments, how long the raid on cash savings may continue for etc.

At the moment with pensions about to be killed off and residential property closed off the classic car market looks to be one of the last places to park excess capital and not be at high risk of then being milked.

So I think the drivers for the UK classic market are potentially really strong at present but await clarity in April but that the global drivers that dwarf our local market are at the highest risk since 2007. The key for 2016 is how many lenders will foreclose on the many debt ridden car collectors and how many cars are pushed into the market by margin increases. And obviously, whether there are enough buyers sitting on the other side, feeling bullish enough about the global economy to bid them up and take them home.

The risk as I see it is that there are fewer buyers with less money to commit in a global basis than we have seen for years and so any increase in supply is a massive risk to triggering a sell off.

And we just have to remember that this is an unregulated market, flooded with crooks and swindlers, tax evaders and fraudsters and there will be no government support to underpin the market.

I'm not betting on a crash but the increased risk does mean that I'm putting a car or two up for sale just to reduce exposure to be honest.

[chappardababbar]

Thanks - been following your thoughts for a while. Please keep them coming.

DonkeyApple said:

Prices don't seem to have moved but stock is still slower to shift.

I think there are two factors to focus on this year. On the macro side the continued rebasing of the speculative commodity bubble and the oil war between Saudi and the US is collecting more and more scalps each week. LTVs on classic cars has been rising and lenders are already forcing the handof some collectors to be reducing stock so as to raise their margins. So we are at considerable risk at present of forced sellers growing and creating a tipping point.

On the local, micro side, almost everything seems to be on hold until the April budget. The U.K. Investment market is waiting to learn whether pensions will still exist in any viable format for high earners, what exactly the additional property taxes will be, whether there will be additional raids on investments, how long the raid on cash savings may continue for etc.

At the moment with pensions about to be killed off and residential property closed off the classic car market looks to be one of the last places to park excess capital and not be at high risk of then being milked.

So I think the drivers for the UK classic market are potentially really strong at present but await clarity in April but that the global drivers that dwarf our local market are at the highest risk since 2007. The key for 2016 is how many lenders will foreclose on the many debt ridden car collectors and how many cars are pushed into the market by margin increases. And obviously, whether there are enough buyers sitting on the other side, feeling bullish enough about the global economy to bid them up and take them home.

The risk as I see it is that there are fewer buyers with less money to commit in a global basis than we have seen for years and so any increase in supply is a massive risk to triggering a sell off.

And we just have to remember that this is an unregulated market, flooded with crooks and swindlers, tax evaders and fraudsters and there will be no government support to underpin the market.

I'm not betting on a crash but the increased risk does mean that I'm putting a car or two up for sale just to reduce exposure to be honest.