The Collector’s Car Market 2019

The Collector’s Car Market 2019

After several discussions with experts in the vintage, classic and special interest collector sector, we learned that buyers are not feeling the need to rush into the market as it has cooled.

Today’s buyers are said to be people interested in cars for what they actually are, rather than cars representing another alternative investment asset class.

That sentiment can bring people that have been priced out of the market back in. It also means that the buyers are more particular, and not rushed into a decision for fear of missing a deal. 

Today, buyers seek more of information, history, and photographs, and some do take the time to go see and drive a car.

An expectation of a strong pull back or correction frame among sellers has proven to be a major impediment to transacting sales.

During the strong value upswing, marketers and brokers needed to explain the market considerations once to a seller. But, in the market downturn explanations and seller realizations take time.

Sellers remember what their cars were worth, or more correctly what a similar model sold for at the height of the market. It is understandably hard to admit to themselves that they missed the highs. 

Once that understanding is clear and expectations softened, the sector managers see that cars priced at today’s correct market range will sell reasonably quickly with the right exposure. They are also seeing a generational change in the overall market.

They say the explanation is: “if you do not remember ever seeing a car parked on the street that you yearned after in your youth, you are unlikely to identify strongly enough with it to part with your savings to own it today”.

Because of changing buyer demographic, and a larger supply of cars from this era, the demand lessened, and values for cars made before the late 1950’s. There are exceptions, but in the mainstream market, it is true.

The current active buying population, still primarily comprised of Baby Boomers.

Another major contributing factor to the slowing of sales in the United States is the removal of the “1031 exchange” from every market except real estate. 

In the past, an owner with an appreciating car asset, could put the funds from a sale with an exchange facilitator and direct them to purchase other cars with some of the proceeds.

This sometimes resulted in multiple sales of vehicles brought on by the tax- sale of 1 expensive car. 

The experts in the sector are exploring possibilities where the capital gains from the sale of an automotive asset could be transferable to other assets. If proven feasible on a large scale it may bring previously tightly held cars bound by negative tax implications to the market, though not resulting in multiple sales.

I am told that high quality cars, including very accurate replicars with broader use continue to sell well, now. Cars with several purposes and uses including eventing with minimal prep or team support, are doing well in the market.

The more relaxed events, non-official rallies, vintage races, cars and coffee-type get togethers are catering to these more casual mixed-use cars.

Assuming they are priced correctly, cars which are not ‘perfect‘ but very presentable, and easy to casually show, are more in demand than fully restored examples which demand very careful handling. 

Cars which are comparatively simple to use and can be operated by friends or spouses are becoming popular.

Today, there are more events on the calendar where car lovers can participate with their vehicles than ever before, and events like the Villa de Este, Pebble Beach, Le Mans Classic, the Mille Miglia and other Tier 1 events continue to be oversubscribed, there is keen interest overall.

The above being the state of the sector, moving forward in the near term, there solid reasons to buy a vintage, classic or interesting car, rather than counting on the car to outperform other investments.

Have a Happy New Year week

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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