Time stops as a vintage beauty takes the stage. The atmosphere feels heavier as bidding begins, and that weight grows with each bid, only for the room to explode into applause when a gavel confirms the sale. This is the reality of the classic car market — dynamic, thrilling, and forever surprising, especially when attending a public auction, like those held online by SCA auctions.
Today, we will take you on a captivating ride through the lanes of history, technology, and passion, unveiling the trends and insights that steer this exciting international market.
The Ebb and Flow of the Global Classic Car Market
Like any other market, the classic car market is not immune to the ebb and flow of economic tides. After enjoying a nearly two-decade run of prosperity that saw values rise exponentially, especially in a public auction, it seems to have plateaued. This doesn’t mean, however, that the market is in a downturn; it’s merely experiencing a normalization process, something not uncommon in a mature market.
It’s essential to remember that despite this slowdown, the market remains vibrant and dynamic, with many investors and collectors still making substantial profits.
The Effect of Demographic Shifts
One of the key influencers shaping the classic car market’s trajectory is an emerging demographic shift. As the Baby Boomer generation, traditionally the backbone of classic car collectors, ages, the market is seeing a passing of the torch to the younger Generation X and Millennials, which is reflected in the changing tastes of the market.
Cars from the 70s, 80s, and 90s are gaining popularity, with models like the 1992 Acura NSX and 1984 Ferrari Testarossa gaining traction at auto auctions. This shift in preference aligns with the nostalgic years of these younger generations.
The Current Market
The used car market, particularly the collector car segment, has recently seen notable fluctuations. Following a surprising period when used cars only a few years old were resold at profits, prices have begun to fall, with some models depreciating more significantly than others. This downward trend is expected to continue throughout 2023, with the exact degree of deflation still under debate.
Despite these changes in the mainstream used car market, prices for new cars are expected to stay relatively high in 2023. Automakers seem comfortable with current conditions and the scarcity of new vehicles, meaning that ramping up production to pre-pandemic levels might take some time.
Real-World Market Examples
In the collector car market, online auction site Bring A Trailer saw a 50% increase in year-over-year sales in 2022, resulting in over $1.35 billion in transactions.
However, this success is not necessarily indicative of the overall market’s health, as this surge may be attributed to the site’s lower fees attracting more buyers and sellers from traditional marketplaces. Contrarily, the Hagerty Market Rating, which considers auction results, private sales, expert opinions, and overall collector car market activity, shows a contraction for the third month in a row as of December 2022.
This situation is reminiscent of the rating drop experienced in the early days of the pandemic. Although the market rating is higher now than it was then, the continued contraction signals the need for cautious anticipation of future trends.
Furthermore, according to Bloomberg, the collector car market largely mirrors the stock market and the general economy. Therefore, the economic outlook for 2023, which is a topic of significant debate, will likely influence collector car values.
Another important factor to consider is inflation, which has divergent impacts on economic activities and prices. The increasing cost of living may inflate prices in the collectible car market and affect market demand.
The Influence of Globalization
The classic car market is not limited to a particular geographic area; it’s truly a global phenomenon. The appeal of owning a piece of automotive history transcends borders, making it a worldwide hobby.
While Europe and North America still lead the charge, Asia and the Middle East are catching up fast. For instance, China, despite its prohibitive import regulations, is seeing a growing interest in classic cars, especially amongst its wealthier citizens.
The increased accessibility to a global public auction, whether in-person or via digital platforms, has only fueled this growth, allowing bidders from around the world to participate.
Digital Transformation of Auctions
In the age of technology, the classic car market is undergoing a digital transformation. Public auctions, like those held by SCA, are increasingly being held online, opening up the market to a broader audience. Online platforms have democratized access, allowing anyone with an internet connection to browse, bid, and buy.
This has led to a significant increase in participation. It helped keep the market buoyant even during the pandemic when physical auctions were not possible. The impact is such that many believe the future of car auctions lies online.
Future Trends and Insights
Despite the complex and varying trends, it’s important to recognize that the market is always nuanced with strong and weak segments.
For example, trends like Electric Vehicle (EV) conversions for classic cars are rapidly gaining popularity. Market preferences are shifting as generational interests change. The younger generations showing interest in 80s and 90s cars while staple post-war classics still hold strong value.
The Hagerty Market Index, reaching an all-time high in December 2022, suggests that even if the market were to drop, there’s plenty of cushioning to absorb the fall. The idea of blending vintage aesthetics with modern technology is quite appealing to many collectors. In the auction world, the rarest and most iconic models will continue to command top dollar.
However, cars with a significant cultural impact or those tied to historic events or personalities will also be in the spotlight. For example, Steve McQueen’s 1968 Ford Mustang GT from “Bullitt” fetched $3.74 million at a 2020 Mecum auction, proving that provenance can add significant value.
The Final Lap of Our Classic Journey
As the checkered flag waves on our exploration of the classic car market, we realize that this vibrant, dynamic arena mirrors the vehicles it treasures: classic, yet forever evolving. Auction houses like SCA offer buyers ample opportunities to get a classic car of their own or rent a car.
From shifting demographics and expanding global interest to the burgeoning digital landscape and emerging trends, this market is a fascinating microcosm of history, passion, and investment. As we journey forward, we eagerly anticipate the thrills and surprises the future holds for the world of classic cars.