Have Classic Car values found a new level?

[lowdrag]

GTIAlex said:

Suggest you learn to read

How bloody rude.

[Kawasicki]

Classic cars haven't found a new level. The prices will crash again, just like every other time.

[johnxjsc1985]

Kawasicki said:

Classic cars haven't found a new level. The prices will crash again, just like every other time.

when did they last crash. As a resource they are becoming rarer .

[Mr Tidy]

devs said:

I've always wanted an early 80's 911 and should have bought one years ago when they were affordable.

Following a recent bereavement, I thought to myself that life is way too short and then continued to sell pretty much everything I had in the garage and yesterday i finally bought a 1984 911. I'm collecting it next week.

I was concerned that I may miss my one opportunity to actually buy one of these cars as their values continue to rocket and the entry level will become unreachable.

Whilst I know I've bought at the most expensive time and it may come back to bite me in the arse, big bucket list tick for me and in my current mindset, you don't have long in this world so ... one happy man!

Great post - I hope you enjoy it, and while you may have bought at the top of the market I can only see them going one way (as in up)!

We're all only here once, and I've only ever regretted the things I didn't do so if you want something you just have to go for it!

I took a pension early and used the lump sum to buy a car I've loved for years, a BMW Z4 Coupe.

Sadly I think a 911 will remain forever out of reach now - which may be why I'm still regretting the things I didn't do!

[lowdrag]

johnxjsc1985 said:

Kawasicki said:

Classic cars haven't found a new level. The prices will crash again, just like every other time.

when did they last crash. As a resource they are becoming rarer .

You obviously don't remember 1991 then. My E-type was worth £75,000 in 1990 ad £25,000 a year later. I bitterly regret missing a very early car sold at auction in 1992, restored at a cost of £60,000, and it fetched £21,000. Frank Dale and Stepsons, renowned Rolls Royce specialists, went bust as did many classic car people. I knew one person who was making £100,000 a week for a while but lost his house at the end of it. But this time it is a very different market from then. Now it isn't parochial but international and the infrastructure is solid. As they say in the stock markets, "no one rings a bell when the market is about to crash", so never say never. I still have a copy of The Economist of October 1987 saying that the market was set fair to move on in leaps and bounds. That was on Friday; on Monday the market fell 25%.

[johnxjsc1985]

lowdrag said:

You obviously don't remember 1991 then. My E-type was worth £75,000 in 1990 ad £25,000 a year later. I bitterly regret missing a very early car sold at auction in 1992, restored at a cost of £60,000, and it fetched £21,000. Frank Dale and Stepsons, renowned Rolls Royce specialists, went bust as did many classic car people. I knew one person who was making £100,000 a week for a while but lost his house at the end of it. But this time it is a very different market from then. Now it isn't parochial but international and the infrastructure is solid. As they say in the stock markets, "no one rings a bell when the market is about to crash", so never say never. I still have a copy of The Economist of October 1987 saying that the market was set fair to move on in leaps and bounds. That was on Friday; on Monday the market fell 25%.

yes 26 years ago the market went nuts then and could only go one way. Its a bit more select these days and hopefully the market is driven by people who love Cars not investors .

[aeropilot]

johnxjsc1985 said:

lowdrag said:

You obviously don't remember 1991 then. My E-type was worth £75,000 in 1990 ad £25,000 a year later. I bitterly regret missing a very early car sold at auction in 1992, restored at a cost of £60,000, and it fetched £21,000. Frank Dale and Stepsons, renowned Rolls Royce specialists, went bust as did many classic car people. I knew one person who was making £100,000 a week for a while but lost his house at the end of it. But this time it is a very different market from then. Now it isn't parochial but international and the infrastructure is solid. As they say in the stock markets, "no one rings a bell when the market is about to crash", so never say never. I still have a copy of The Economist of October 1987 saying that the market was set fair to move on in leaps and bounds. That was on Friday; on Monday the market fell 25%.

yes 26 years ago the market went nuts then and could only go one way. Its a bit more select these days and hopefully the market is driven by people who love Cars not investors .

With years of ultra-low interest rates, compared to back then, I think the market is being driven by investors even more than back then. This is being reflected in everything remotely considered collectable, not just classic cars.

[lowdrag]

And of course, no one is forgetting that there is no tax on the profit, now are they? It has been a time when all has come together at once and there has been money to be made. It can't go on for ever since with the upward march of interest rates something else will take their attention and cars will be sidelined. Will it mean a crash in value, a levelling off, or a gentle dip we know not, but what goes up must come down as they say. I am starting to examine the tulip bulb futures.

[a8hex]

johnxjsc1985 said:

Kawasicki said:

Classic cars haven't found a new level. The prices will crash again, just like every other time.

when did they last crash. As a resource they are becoming rarer .

Not sure about classic cars becoming rarer, more and more cars seem now to be classified as classics.

[CubanPete]

a8hex said:

johnxjsc1985 said:

Kawasicki said:

Classic cars haven't found a new level. The prices will crash again, just like every other time.

when did they last crash. As a resource they are becoming rarer .

Not sure about classic cars becoming rarer, more and more cars seem now to be classified as classics.

Everything over 15 years old and a bit sporty is now on it's way to being considered a classic. There seems to be a 3 year window when stuff falls out of favour / attracts the barry boys before it starts going up again.

I think the market is overcooked in many places, particularly newer stuff, minis, fast fords, VW vans. A nice pre-war classic car can be had for sub £10k, which is where I see a lot of mainstream newer classics dropping back to once the market clocks a lot of these cars actually aren't that rare, or that special.

[Plinth]

lowdrag said:

You obviously don't remember 1991 then. My E-type was worth £75,000 in 1990 ad £25,000 a year later. I bitterly regret missing a very early car sold at auction in 1992, restored at a cost of £60,000, and it fetched £21,000. Frank Dale and Stepsons, renowned Rolls Royce specialists, went bust as did many classic car people. I knew one person who was making £100,000 a week for a while but lost his house at the end of it. But this time it is a very different market from then. Now it isn't parochial but international and the infrastructure is solid. As they say in the stock markets, "no one rings a bell when the market is about to crash", so never say never. I still have a copy of The Economist of October 1987 saying that the market was set fair to move on in leaps and bounds. That was on Friday; on Monday the market fell 25%.

That pretty much sums it up!
I had forgotten about Frank Dale going bust.
My late father and I were mucking around with classics then, but managed not to get in a pickle.
Was it the case (as I have been told) that a contributory factor to the crash was a D Type that failed to sell at auction (Coys?) in late 1990 that got some of the speculators re-thinking their plans?

[Horsetan]

Plinth said:

lowdrag said:

You obviously don't remember 1991 then. My E-type was worth £75,000 in 1990 ad £25,000 a year later. I bitterly regret missing a very early car sold at auction in 1992, restored at a cost of £60,000, and it fetched £21,000. Frank Dale and Stepsons, renowned Rolls Royce specialists, went bust as did many classic car people. I knew one person who was making £100,000 a week for a while but lost his house at the end of it. But this time it is a very different market from then. Now it isn't parochial but international and the infrastructure is solid. As they say in the stock markets, "no one rings a bell when the market is about to crash", so never say never. I still have a copy of The Economist of October 1987 saying that the market was set fair to move on in leaps and bounds. That was on Friday; on Monday the market fell 25%.

That pretty much sums it up!
I had forgotten about Frank Dale going bust.
My late father and I were mucking around with classics then, but managed not to get in a pickle.
Was it the case (as I have been told) that a contributory factor to the crash was a D Type that failed to sell at auction (Coys?) in late 1990 that got some of the speculators re-thinking their plans?

There was also the Japanese collector who laid out something like £8m on a Ferrari 250 GTO at the tail end of the '80s. By the mid-1990s, its value had reduced somewhat to about £2.5m. That went well.

[Lowtimer]

Providing he kept it, yes, it did go well for him as it's worth anything between $30m and $50m now.

[Horsetan]

Lowtimer said:

Providing he kept it, yes, it did go well for him as it's worth anything between $30m and $50m now.

Seems he didn't. It was sold on in 1994 for that £2.5m. ....which is why I wrote "that went well". The bloke who ultimately ended up with it would certainly have been laughing.

[v8250]

lowdrag said:

I am starting to examine the tulip bulb futures.

Tony, that's very good...trust that will be a black tulip bulb?

[lowdrag]

v8250 said:

lowdrag said:

I am starting to examine the tulip bulb futures.

Tony, that's very good...trust that will be a black tulip bulb?

I'll consult my friend Alexandre on that one.

[v8250]

lowdrag said:

v8250 said:

lowdrag said:

I am starting to examine the tulip bulb futures.

Tony, that's very good...trust that will be a black tulip bulb?

I'll consult my friend Alexandre on that one.

May be you'll find him in the farmhouse!

[LimaDelta]

The problem is that since 2008 classic cars have become yet another speculative bubble. Having cash sat in an account now is completely pointless due to (non-existent) interest rates alternative investments have become a much better use of money. The current classic prices (at least, the rate of rise) can't be sustainable forever, but it will be interesting to see how far these investor-purchasers can push it. Just a shame now that many enthusiasts have been completely priced out of the ownership experience. IMHO.

[mph]

LimaDelta said:

The problem is that since 2008 classic cars have become yet another speculative bubble. Having cash sat in an account now is completely pointless due to (non-existent) interest rates alternative investments have become a much better use of money. The current classic prices (at least, the rate of rise) can't be sustainable forever, but it will be interesting to see how far these investor-purchasers can push it. Just a shame now that many enthusiasts have been completely priced out of the ownership experience. IMHO.

I don't have any definitive figures but I would speculate that at least 95% of all classic cars are still owned by enthusiasts.

Some of those enthusiasts may have been encouraged to buy or improve on the basis that their pride and joy has held it's value, or even appreciated, but they're hardly speculators in the true sense of the word.

At the rarified top end of the market there are certainly cars that are bought for investment, but they represent a very small portion of the total. Even in those cases the "investor" is often an enthusiast as well.

On a personal level I've had several cars restored over many years. I've done it because I love classic cars and take satisfaction in leaving them in a better state than I found them. One or two I wouldn't have been able to afford to do without the rise in values.

I do wonder why the "enthusiasts" that have allegedly been priced out of the market didn't buy these cars when they were affordable. Perhaps they only became enthusiastic when the prices began to rise.

There was a time when I could have afforded a Vintage Bentley. I didn't have the foresight to buy one but I don't "blame" anyone other than myself for not doing so. Neither do I begrudge those who own them now.

[LimaDelta]

mph said:

LimaDelta said:

The problem is that since 2008 classic cars have become yet another speculative bubble. Having cash sat in an account now is completely pointless due to (non-existent) interest rates alternative investments have become a much better use of money. The current classic prices (at least, the rate of rise) can't be sustainable forever, but it will be interesting to see how far these investor-purchasers can push it. Just a shame now that many enthusiasts have been completely priced out of the ownership experience. IMHO.

I don't have any definitive figures but I would speculate that at least 95% of all classic cars are still owned by enthusiasts.

Some of those enthusiasts may have been encouraged to buy or improve on the basis that their pride and joy has held it's value, or even appreciated, but they're hardly speculators in the true sense of the word.

At the rarified top end of the market there are certainly cars that are bought for investment, but they represent a very small portion of the total. Even in those cases the "investor" is often an enthusiast as well.

On a personal level I've had several cars restored over many years. I've done it because I love classic cars and take satisfaction in leaving them in a better state than I found them. One or two I wouldn't have been able to afford to do without the rise in values.

I do wonder why the "enthusiasts" that have allegedly been priced out of the market didn't buy these cars when they were affordable. Perhaps they only became enthusiastic when the prices began to rise.

There was a time when I could have afforded a Vintage Bentley. I didn't have the foresight to buy one but I don't "blame" anyone other than myself for not doing so. Neither do I begrudge those who own them now.

Oh, I agree, no begrudging going on here, but you just have to look at the sheer number of threads on PH about the financial elements of car ownership, and relatively few on the enjoyment of driving it is plain to see that many are enthusiastic about the money and not much else.

Cars have not increased in value by many multiples in the last decade because owners have done a bit of cosmetic work here and there, they have shot up at such a rate because it is a speculative market. Only a few years ago one could pick up a Ferrari 550 for about £30k. Indeed I almost did. The same car is now worth £100k+. Why? They are no rarer, no better a car than they were, and probably in no better condition, So why the trebling in value? From where has the increase in value come? Nothing tangible. The car has not 'improved', it is pure speculation. There are plenty of other examples too (Delta Integrales, 911s, etc. - I'm looking at you!).

That and I wish I hadn't sold my immaculate 1979 2-door RR for 2k when I was a student