2012 Collector Car Value Trends

This past weekend I watched the Barrett-Jackson Collector Car Auction for a while.  A few cars sold for prices that I thought were a little low.   This trend is borne out by the Hagerty Collector Car Indices that is part of the 19th Hagerty Price Guide or as can be seen on Hagerty’s website.  The latest plot of the Hagerty Collector Car Indices is presented below.

As you can see from the above plot, Hagerty has developed seven collector car indices.  This makes the data much easier to understand.  What is also clear is that collector car market does not move as one, so the answer to “Is the collector car market good?” is that it depends upon the market that is being talked about.

Over the recent years the high-end collector cars, what Hagerty calls the Blue Chip cars, the Ferraris, and the German cars are increasing in value.  The values of Affordable Classics, British Cars, and 1950s American Classics have been essentially flat.  Finally, the American Muscle cars have declined in value and seem to have stalled in a reduced value condition.

1957 Buick Super Riviera, A Typical 1950s American Classic

It’s hard to know what the best collector car strategy is at this time.  The old stock market investing strategy is “Buy Low, Sell High” would suggest that buying cars in the Affordable Classics, British Cars, 1950s American Classics, and Muscle cars offer the best potential for future growth.

I am be a little skeptical about American Muscle cars.  You have to be very careful and make sure that you have a truly significant car.  Many of the cars that are presented at auctions on television have what I call “contrived rarity” as “this is one of 20 cars of this model that came with brown paint, a 300 cubic inch engine, no heater, AM radio, and rally wheels, and tinted windows”.

The other aspect of American Muscle cars is the investment impact of “resto mods” and the “tribute cars”.  These are nice cars to own and drive, but I think that they have little investment potential, as someone can always build another one.  It’s hard to see their value increasing.  Also, I think that the tribute cars are holding down the value of the original car.  For example, if you really want to drive a Chevelle SS454, you don’t have to spend big money for an original when you can buy a tribute car.  These alternatives to a real Chevelle SS454 would reduce the upward growth pressure on the price a real Chevelle SS454.  For all of these reasons, I would stay out of the American Muscle car market if you are looking for an investment.

For these reasons, in my opinion, the investment choices would be reduced to the Affordable Classics, British Cars, and 1950s American Classics.  The choice among these would depend upon which type of car that you would like to have and drive.  While I think that these have potential for growth in value, however you might have to keep it for three or four years in order to make a good return on your investment, so make sure that you like the car.  With the high cost of skilled labor to work on these cars and the difficulty in finding some parts, in these classes you should always buy the car in the best condition that you can afford if you want to make some money.  This is particularly true with the 1950s American Classics that were dripping in chrome.  The cost of restoring these over-the-top cars can be very high.

For a complete view of the market and explanation of these indices, consider getting the latest copy of the Hagerty Price Guide or go to the Hagerty website.

www.hagerty.com

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