Silverstone Auctions Porsche sale results
Are we too familiar with expensive Porsches, or do these prices not look completely absurd?
Examples? A pair of 968 Club Sports in the region of £25,000, a low mileage 996 GT3 at £70,000 and a right-hand drive, manual 928 GT that sold for £24,750. More expensive than they once were, yes, but seemingly no longer on a meteoric rise.
Silverstone even sold a couple of affordable 911s. Yes, really. This manual, silver 996 Carrera 2, with a decent service record and just over 70,000 miles, sold for £14,625. At slightly more money (£16,880), this Carrera 2 of similar vintage comes with the added provenance of being an ex-press car... Its service history is very nearly all from OPCs, plus there's been a recent £6K top-end rebuild. Long live the amber indicators!
Of course for those still inclined to spend a lot of money on a 911, the opportunities are still there. Like the £200K 1972 S. A flatnose 930 Turbo also smashed its lower estimate and sold for £140,000, while the £168,750 commanded by a 997.II GT3 RS was £30,000 above its lower guide. Lot less than a 911 R though... For GT3 thrills at half the money, a Manthey tweaked 996.II Clubsport sold for £63,900 and this LHD first-gen car made £66,460.
An interesting sale then, with 70 per cent of the lots sold and total sales of £2.5m. There were one or two cars left unsold you might not expect though, including a Carrera GT - see the full list of results here. Silverstone Auctions' next sale is in November; cars can be Christmas presents enjoyed by all the family, right?
The asset-buying car people will have already shifted these items off their balance sheets and reinvested - leaving the rest of us to cheer for the return to sensibly priced cars over the next 3 years
The asset-buying car people will have already shifted these items off their balance sheets and reinvested - leaving the rest of us to cheer for the return to sensibly priced cars over the next 3 years
With no external entities to step in and vision the fall by buying up supply or halting banks delivering stock to the markets the chances for such markets to unwind gently are immensely slim.
The only real question is what the trigger is likely to be and when the event will happen. The fact that it will be a monumental rout is very hard to disagree with.
The key here will be how high inflation rises and how Carney reacts. Notwithstanding, if you couldn't service your borrowings for say 5 years out of cash in the bank with base rates at 5 percent within 2 years then I would be concerned
Asset classes such as classic cars have no such entity to step in to prevent market forces from applying. They are true markets and in the case of classic cars it is a highly leveraged market especially at the top end.
Lenders won't be calling people up to chat about how they will be restricting the debt on their home and the BofE won't be slashing interest rates to zero to stem defaults and not will the State be pretending lenders from aggressively dealing with arrears and defaults or offering 'help to buy' schemes. Same with stock markets and currency markets as well as commodity markets. All ultimately underpinned by States and central banks.
Property is a politically under pinned and artificial market. Classic cars are a true market and the two types share almost no similarity in how they react to either a rise in debt funding costs or external trigger events.
So, if people find themselves struggling to meet the finance obligation on their classic car what do you genuinely believe that lender will be doing? For the honest answer you need look no further than the assets of various leveraged collectors who's income and wealth was derived from the price of oil.
The change of sentiment alone will drive values down. If lead assets are being forced into the market by lenders (who are the ultimate owners) then once the sell off commences who is going to sit on the other side of the sale and deliver matching demand? No one. What people will be doing is trying to unwind their own debt or convert their investment into an alternate asset as quickly as possible just adding to the supply while almost all demand falls away overnight.
But this is part of the point, a huge number of people today have never witnessed a true, free market asset value correction only State and central bank artificial market manipulations.
However, anecdotal evidence would suggest that those buying the cars that have increased in value the most - the rarer, low mileage, classic S & RS examples - have not been borrowing to do so. I don't believe many owners I've spoken to would need to offload their collections due to bad debt, car-related or otherwise.
The cars that have risen in value following on from those at the top end (200k mile 993 at £60k anyone?) are ,I believe, a different story, with many being bought by speculative investors without sufficient capital to ride out a financial storm. I think they would fall into the bracket you describe above.
Happy to be proven wrong though... the return of £35k GT3s can only be a good thing!
However, anecdotal evidence would suggest that those buying the cars that have increased in value the most - the rarer, low mileage, classic S & RS examples - have not been borrowing to do so. I don't believe many owners I've spoken to would need to offload their collections due to bad debt, car-related or otherwise.
The cars that have risen in value following on from those at the top end (200k mile 993 at £60k anyone?) are ,I believe, a different story, with many being bought by speculative investors without sufficient capital to ride out a financial storm. I think they would fall into the bracket you describe above.
Happy to be proven wrong though... the return of £35k GT3s can only be a good thing!
The debt at the lower end is probably fine as your average owner typically will have a pension pot or height LTV property that can be raided etc but at the high end, when the market turns the leveraged Ines will fund it difficult to pay their margin calls as they won't be able to raise the money against other assets. In that regard it will be exactly the same as the highnet worthy who were over leveraged learned in 2008.
I don't think we should under estimate the amount of debt that is in this asset class because it's no longer about car appreciation but speculation and investment. And the number of specialist lenders for this asset has expanded immensely in the last decade
Interesting. I, perhaps naively, hadn't considered people borrowing specifically to invest. I've only spoken to 'enthusiast' collectors, who probably give a skewed view of the situation.
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