What's Up with Classic Car Prices These Days?
Discussion
Reason dictates, and I demand, that in uncertain times used car prices must fall. They don't. They''re staying firm or they're actually rising, and what's worse people are paying them.
For the past 12 months now I have been scouring the market for a variety of vehicles: 928, 944, Ghibli II, Beta HPE. The overpriced turds haven't moved, but the good ones have lately been flying out the door. What gives?
I'm not sure I'm buying the compensation argument. A very comfortable family vacation will set you back 5k. A fine 928 is triple or quadruple that. Ditto a Ghibli II, if you can even find one.
For the past 12 months now I have been scouring the market for a variety of vehicles: 928, 944, Ghibli II, Beta HPE. The overpriced turds haven't moved, but the good ones have lately been flying out the door. What gives?
I'm not sure I'm buying the compensation argument. A very comfortable family vacation will set you back 5k. A fine 928 is triple or quadruple that. Ditto a Ghibli II, if you can even find one.
You're confusing "uncertain times" with "recession"/"financial market uncertainty".
Normally when the latest finance bubble bursts the big investors stop throwing cash around and lots of the people who were grabbing it faster than they could spend it suddenly find they don't have the cash to risk onmoney laundering alternative investments like classic cars, and in fact are often having to liquidate those assets, leading to those alternative investment bubbles also bursting.
That's not what's happening at the moment - the financial markets have broadly escaped any significant impacts from Covid because it's small, unlisted companies that have been hit hardest and for the bigger boys for every company being stopped trading so seeing a bust there's another trading online seeing a boom. As a result there's still plenty of cash being thrown around to keep other bubbles inflated.
Normally when the latest finance bubble bursts the big investors stop throwing cash around and lots of the people who were grabbing it faster than they could spend it suddenly find they don't have the cash to risk on
That's not what's happening at the moment - the financial markets have broadly escaped any significant impacts from Covid because it's small, unlisted companies that have been hit hardest and for the bigger boys for every company being stopped trading so seeing a bust there's another trading online seeing a boom. As a result there's still plenty of cash being thrown around to keep other bubbles inflated.
Agreed, I was expecting to see the sort of fire-sale bargains we had in 2008 and 2009 but prices have gone up, not down.
I understand there being demand for lockdown projects, last spring and summer anyway, but that time has surely passed for a lot of people. Besides, I've been trying to sell some parts and no-one seems to want them, at very reasonable prices. So they're buying projects but don't need parts? Hmmm.
I share your confusion. I don't get how prices have gone up sharply on many cars, despite more unemployment, less employment certainty and people on furlough not being on full wage.
Edit: fair point about certain sectors booming, and credit is still cheap. But to pay off the credit you still need a job. I'd have thought there would still be more people selling toys and projects as their wage drops or they lose their job or business, than there are people riding a boom wave and splurging on a new toy.
I understand there being demand for lockdown projects, last spring and summer anyway, but that time has surely passed for a lot of people. Besides, I've been trying to sell some parts and no-one seems to want them, at very reasonable prices. So they're buying projects but don't need parts? Hmmm.
I share your confusion. I don't get how prices have gone up sharply on many cars, despite more unemployment, less employment certainty and people on furlough not being on full wage.
Edit: fair point about certain sectors booming, and credit is still cheap. But to pay off the credit you still need a job. I'd have thought there would still be more people selling toys and projects as their wage drops or they lose their job or business, than there are people riding a boom wave and splurging on a new toy.
Edited by FNG on Friday 5th March 10:08
With furlough extended to September, there'll be plenty of people at home hovering over the buy and bid buttons for a while yet. 
Looking at the ACA results from last weekend, I'd agree people are paying above what was expected for many of the cars. Not just the 'guide' prices but the fact that similar cars are available at dealers, with a warranty for less that buying a car at auction!
https://angliacarauctions.co.uk/classic/sat-27th-s...
Looking at the ACA results from last weekend, I'd agree people are paying above what was expected for many of the cars. Not just the 'guide' prices but the fact that similar cars are available at dealers, with a warranty for less that buying a car at auction!
https://angliacarauctions.co.uk/classic/sat-27th-s...
You also have historically low interest rates to consider.
Normally money would jump from a volatile stock market into secure bonds and hard assets (e.g. gold). As a result markets, both stocks and alternative investments, would suffer dramatic falls.
At the moment we haven't seen a stock market collapse and while there have been jitters, sending gold through the roof, with such poor bond returns there's probably been more money going into alternative markets rather than less/outflows.
Normally money would jump from a volatile stock market into secure bonds and hard assets (e.g. gold). As a result markets, both stocks and alternative investments, would suffer dramatic falls.
At the moment we haven't seen a stock market collapse and while there have been jitters, sending gold through the roof, with such poor bond returns there's probably been more money going into alternative markets rather than less/outflows.
Two things are driving demand, and therefore values, up.
The proposed 2030 ban on new ICE cars is making people panic that the car they’ve always dreamed of owning will be legislated out of existence in 9 years, so must take the plunge and enjoy it now whilst they still can.
The pandemic has shifted people’s attitudes toward risk vs. reward. Money they were setting aside for more sensible things is being spent on things that will improve their quality of life now, such as a fun car. Certain people have become a bit more fatalistic.
The proposed 2030 ban on new ICE cars is making people panic that the car they’ve always dreamed of owning will be legislated out of existence in 9 years, so must take the plunge and enjoy it now whilst they still can.
The pandemic has shifted people’s attitudes toward risk vs. reward. Money they were setting aside for more sensible things is being spent on things that will improve their quality of life now, such as a fun car. Certain people have become a bit more fatalistic.
Petrol cars existing wont be banned. I think its:
1. Lot of people doing well with spare cash to spend and lot of time on their hands atm
2. Most people about to lose their job when the tide goes out either don't know or can't foresee that it will happen to them
3. House prices still going nuts (f me talk about a train crash pending) so people are stupid enough to think that this is making them better off (enjoy taking on the extra debt to help your kids later) - its easy to take out a bit of equity from the freshly stoked housing boom to help to stoke up the classic car market - everyone's a winner ?!?
4. DIY repair programmes and You Tube - anyone with time on their hands can now fix up an old car (what could possibly go wrong)
It's a shame for anyone waiting to buy. It will start to unravel when the helicopter money stops, when the helicopter comes crashing down and people begin to realise we might have some grim times ahead. I'm glad I'm not in the hunt for a classic car or a house at the moment.
1. Lot of people doing well with spare cash to spend and lot of time on their hands atm
2. Most people about to lose their job when the tide goes out either don't know or can't foresee that it will happen to them
3. House prices still going nuts (f me talk about a train crash pending) so people are stupid enough to think that this is making them better off (enjoy taking on the extra debt to help your kids later) - its easy to take out a bit of equity from the freshly stoked housing boom to help to stoke up the classic car market - everyone's a winner ?!?
4. DIY repair programmes and You Tube - anyone with time on their hands can now fix up an old car (what could possibly go wrong)
It's a shame for anyone waiting to buy. It will start to unravel when the helicopter money stops, when the helicopter comes crashing down and people begin to realise we might have some grim times ahead. I'm glad I'm not in the hunt for a classic car or a house at the moment.
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