Who can remember the last price crash?
Discussion
Different type of hype with classic cars this time. Totally different reasons behind it, plus there are more millionaires now and from many different countries.
Saying that, I remember the last crash very well. I'd say some of the more mundane stuff might suffer, but unlike the last crash, I can't see ALL classics suffering.
Saying that, I remember the last crash very well. I'd say some of the more mundane stuff might suffer, but unlike the last crash, I can't see ALL classics suffering.
Hopefully not until after this amazing car has sold! 
http://www.pistonheads.com/classifieds/used-cars/p...
http://www.pistonheads.com/classifieds/used-cars/p...
cc3 said:
Would be interested to know what triggered the last price crash in values in the 1980/90's. Do I recall over inflated values halved overnight ?? What caused the crash? Can't be long until the same happens again and speculators lose their shirt??
Seems like a loaded set of questions. Welcome to Pistonheads.What makes you say that it can't be long before speculators lose their shirt? Would be interested to know what makes you say that.
I not sure how many speculators are paying these current prices and as mentioned above, it's more about wealthy car nuts this time round. The late 80's was a crazy time with high interest rates, loads of currency risk, relatively immature economic policies and people got into speculating on anything and everything to make a fast buck, not just cars. I think the people who are buying these cars today can afford to keep them generally and want them for what they are and can do as opposed to them being just another asset. The crash of 2008 was worse than the early 90s and this wasn't preceded by a big increase in the price of sports cars as far as I remember, so I am not sure the two are even connected. There might be a small correction or a bit of a slow down, but I'm not convinced there's going to be a crash. All IMHO of course.
cc3 said:
Would be interested to know what triggered the last price crash in values in the 1980/90's. Do I recall over inflated values halved overnight ?? What caused the crash? Can't be long until the same happens again and speculators lose their shirt??
Interest rates levels are the answer to both the past crash and the new one that will slowly arrive over time. I'd agree with a couple of the above posts. A market driven by greedy speculators using borrowed money is a LOT more shaky. I appreciate some people have started speculating but usually it's with cash, deposit interest rates being so low. Many are also enthusiasts and they'd rather have their money somewhere it can be enjoyed. Either way, this results in much less chance of seller desperation if values do dip a little (such desperation then bringing a crash/bubble-burst).
I think if interest rates significantly increase there's every chance we'll see a levelling off of the appreciation curve as some liquid cash is put away in banks again.
I think if interest rates significantly increase there's every chance we'll see a levelling off of the appreciation curve as some liquid cash is put away in banks again.
Carl_Docklands said:
Interest rates levels are the answer to both the past crash and the new one that will slowly arrive over time.
If it slowly arrives over time it won't be a crash though.Can anyone think of an event that would cause interest rates in the industrialised nations to rise quickly? These are mature economies with almost no growth left in them and which are relying on significant consumer/homeowner borrowing for 'growth'.
I would think it will be at least 5 years before US/UK/EU rates get near 5%, so it is hardly going to precipitate a crash in car values (which are also rising for other reasons, chiefly that new cars are s
t 
).No need for interest rates to rise, what it will take is the investor/speculator class to feel the top has been reached and look to move their money onwards
1 few more cars come on the mkt,
2 few less buyers,
3 traders reluctant to buy into stock,
4. prices move a little bit backwards to speed up sales,
5. more sellers keen to sell before further drops
Return to start of the circle.
Motivations quoted by many (not all) for buying into classic cars are "investment" or at worse "no deprecation".....once this motivation is at risk (some slip/hiccup in values or change in sentiment), it will take many (not all) out of the mkt.
I don't think we will see the blood bath of the early 90's but wouldn't surprise me if the gains on the last year/ 18 months are unwound.
Big difference this time will be sellers won't sell because they "have to" but because they "want to".
1 few more cars come on the mkt,
2 few less buyers,
3 traders reluctant to buy into stock,
4. prices move a little bit backwards to speed up sales,
5. more sellers keen to sell before further drops
Return to start of the circle.
Motivations quoted by many (not all) for buying into classic cars are "investment" or at worse "no deprecation".....once this motivation is at risk (some slip/hiccup in values or change in sentiment), it will take many (not all) out of the mkt.
I don't think we will see the blood bath of the early 90's but wouldn't surprise me if the gains on the last year/ 18 months are unwound.
Big difference this time will be sellers won't sell because they "have to" but because they "want to".
darreni said:
It's hard to work out just who the smart ones are: those selling in the current climate or those buying.
Or those of us keeping our air cooled cars because they are great fun 
At the end of the day we bought them to drive knowing that we probably wouldn't loose much, compared to everyday family tat. If their values are now crazy then if we have to sell, then great. The chances of them going back to what they were 10 years ago is remote, but not the end of the world.
I can remember a good few years back Peter Morgan writing about is 911 S, I think he bought it in the late 70s early 80s for a couple £K and in the 20 odd years since been offered something like, £5K, £20K, £50K, £70K, £40K, £20K, £10K, £20K and so on, now of course it would be back up in the £70K+ bracket. He just loved driving it.
My view is that it's all about momentum, herd mentality and probably the perceived loss of the "engaging manual 911". IMO lots of people want these cars just because people want them. If you get what I mean. Human nature.
What about if the Government slapped a Capital Gains Tax on classic cars / 2nd / 3rd cars in a household? That would be interesting to see the market reaction. I guess you could always buy a 991 and offset the losses!
Cheers
Slodge
What about if the Government slapped a Capital Gains Tax on classic cars / 2nd / 3rd cars in a household? That would be interesting to see the market reaction. I guess you could always buy a 991 and offset the losses!
Cheers
Slodge
Anybody use the Hagerty valuation tools? Although US based they seem one of the best sources of accurate data
http://www.hagerty.com/valuationtools
http://www.hagerty.com/valuationtools
braddo said:
Carl_Docklands said:
Interest rates levels are the answer to both the past crash and the new one that will slowly arrive over time.
If it slowly arrives over time it won't be a crash though.Can anyone think of an event that would cause interest rates in the industrialised nations to rise quickly? These are mature economies with almost no growth left in them and which are relying on significant consumer/homeowner borrowing for 'growth'.
I would think it will be at least 5 years before US/UK/EU rates get near 5%, so it is hardly going to precipitate a crash in car values (which are also rising for other reasons, chiefly that new cars are s
t ).I hope there is a flash crash though, Expensive cars, like houses are no good except for the speculators.
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