Good and interesting old cars are not the good investment they used to be. I don’t like this one bit, but somebody has to be blunt about it. The buyers have aged and the market is shrinking. The classic car industry is chasing “high net worth individuals” and focused on returning profits to their investors. Conditions and tastes have also changed. “Fun to drive” is now a quaint criteria when buying a car. But that is exactly what I enjoyed about sports cars when I got my license in 1964. After all, my first restoration (rescue) was an MG-TC! Frankly, I think it was inevitable after the pandemic, and I said so in my post about my last visit to Monterey Madness in 2019. But there is still hope.
Some History
Cars were not investments fifty years ago either when I was half of the crew that restored a Rolls Royce Silver Ghost and funding my university education. Rescuing fabulous old cars was an expensive hobby back then too, like boats and planes. Complying with safety and emission regulations made new cars boring. Suddenly, ten- and twenty-year-old cars became desirable. Many got refurbished to better than new, then loved anew. Not so today. Because new cars are so much better than old ones, it is hard to justify using collectible cars like we used to, primarily because our needs and demands have changed. Unfortunately, the high demand for (mostly irrational) SUVs and 4-door pickups has made driving and parking nice old cars among those giants a Jurassic experience.
My visits to the Monterey peninsula and the Concours d’Elegance at Pebble Beach began when their aquarium opened and Rick Cole started his Monterey Sports Cars Auctions. By 1989, I was deep into this hobby and fell in love with a Maserati Vignale Spider that I couldn’t afford. So I bought an Alfa Romeo Giulietta. A slow recovery from a financial crash caused by computers and the dot-com boom made everybody optimistic that life with nice old cars would make our golden years exceptionally sweet, and possibly even profitable, for some of us. That is when I bought a better Vignale Spider and then later a Jaguar E-type coupe to help me through the restoration process of our roadster. They were the Apple stock I should (could) have bought.
Now we know that the last half century between then and now was phenomenal — a sweet spot in our car hobby that could pay for itself. Two of eight cars I bought, then restored to a high standard, and sold in 2017 and 2018, paid for my hobby. Two more were friendly adoptions and three are keepers. That won’t happen again, unless you have a lot more money to spend and get lucky.
The Declining Classic Car Market
In 2023, the Magnificent Seven stocks on NASDAC logged an impressive average return of 111 percent. Even hypercars can’t do that. Our new reality is that money parked in a good car literally doesn’t go anywhere anymore. Today’s demographics can’t sustain, much less grow this market. Aging owners of the classics are more inclined to liquidate than die and bequeath them. And, there are too many historically or technically interesting cars already restored or preserved in this market. Consignment shops are full and dealers are pulling back. Cars labelled as RNM (reserve not met) are trending upward on Bring a Trailer. CCCA classics are fading from relevance. Prices seem to trend inversely proportional to size and weight. When is the last time you saw a pre-war classic being driven? Either their owners have had their drivers licenses revoked due to failing eyesight or they cannot remember where they put their keys. It is hard to imagine any car of which there are more than a few hundred, as a sure thing for parking your money now, enjoying it and watching it get appreciated by the enthusiasts who will replace us. What can a short seller do with cars?
Some say this “hesitation in the market” is a fluke. Of course, there will always be stupid money or passion-driven purchases that are not on trend — but make headlines. Now or never, and win at all cost are powerful motivators for irrational exuberance. You cannot measure the value of history and patina to an aficionado, real or reimagined. BUT, many suspect that the collector car party is now a wake.
Besides, modern high-performance cars will do more for the adrenalin junky than we could dream of in a street car when we cruised on Woodward Avenue in Detroit. And, they are also infinitely safer and easier to drive. But for us old-school enthusiasts who might be tempted to try living with one, just one, most are too wide and many are ugly!
The Market is Focused on Investors and High New Worth Individuals
Starting this century, it felt like the classic car hobby was experiencing a hostile takeover. For-profit businesses hijacked our eccentric car interests and fun events, and repositioned our festivities as a “lux lifestyle” for sale and profit before the concours. VIP social events proliferated and raising the price of admission to control crowding had the opposite effect. It only validated the invasion of the one percent. In particular, high-end Porsches, Lamborghinis, and Ferraris are morphing into symbols of defiant wealth. Hypercars are for the spoiled rotten or insane.
Monterey Car Week, which used to be a nice longish weekend for classic car enthusiasts, gradually evolved into a week-long business convention where investors look for bellwether cars that might be leading indicators of market trends. Last spring, I received an email from Hagerty inviting “high net worth individuals” to their second annual Motorlux event at the Monterey Jet Center. This event offers VIPs an exclusive evening (3,000 people!) for lifestyle schmoozing. (Would you like to buy a Bell helicopter with that Ferrari SF90 Stradale?) But wait, if you don’t want to associate with the riff-raff that paid $500 for a Motorlux ticket, you can cough up another $200 to join the Motorlux Club where you can hangout in an even more exclusive tent for the evening.
However, I read that Monterey Car Week ran out of gas in 2023. Broad Arrow Auctions, in conjunction with Hagerty’s Motorlux event, expanded to two days at the Monterey Jet Center. That second day’s effort produced only 6 percent more sales. And Larry Trepel observed in Sports Car Market: “High-end buyers were adding some bear to this normally bull market.” Broad Arrow was disappointed. Observers could not believe the market is changing at the high end too, where “flying private” is not uncommon. Could it be that Hagerty’s high net worth individuals remained sober. Nobody bought a helicopter at the Jet Center, boo hoo!
Structural Problems with the Car Hobby
But even in our more down-to-earth orbit, this car hobby has acquired structural problems, such as:
- Mechanics are almost extinct in developed countries, replaced by “technicians” who won’t touch analog cars.
- Products for maintaining old cars are disappearing — gasoline at the pump now has special needs, lubricants have to be vetted by experts, and paint isn’t what it used to be.
- Only the creme-de-la-creme of real classic cars are in circulation; the rest are in assisted living or their heirs don’t even provide proper care.
- Many worthy project cars are in purgatory due to the high cost of restoration and the cost-benefit ratio.
- It is really hard to find a place and time for fahrvergnügen — most people drive like walking their dog or pushing a baby stroller, constantly minding their social media instead of simply enjoying the moment.
- Our show events don’t appeal to enough young people, except perhaps the Goodwood Revival (https://www.goodwood.com).
- Many younger people are crushed by student loans and high interest rates making financing a classic car difficult (but we survived double-digit interest rates when we started collecting cars).
Is Driving Still Fun?
The joy of driving a classic car is trending down too (except for pay-before-you-go track days and guided tours). Our rear view mirrors are often filled with expensive behemoth trucks or SUVs (which are now mobile offices with steering wheels). Yet, their threatening angry looks and stance are very profitable. Truck chassis hold the “Big Three” by their financial balls. Only rarely are they used for anything approaching their capability or capacity. And, younger drivers want touch screens in their mobility modules. Sales people call them “infotainment” centers. Why? Because driving is not meant to be fun or require your full attention anymore.
Self-driving cars and EVs are the new thing — aspirational mobility appliances. I strongly suspect that fun and driving don’t belong in the same thought anymore. Just getting there safely is all that matters. And being entertained while wrapped in a nice comfortable bun is now a priority. What’s left? Look nice and unusual when parked? For me that is not enough. My focus has shifted to visiting my former cars owned by friends and organizing small tours with new and younger friends who appreciate my Giuliettas and E-type.
At least modern mobility is safer, cleaner and definitely more relaxing than driving a classic. There is enough stress from news and social media to make thrill seeking superfluous. Fun is rarely mentioned anymore. As a matter of fact, it is so quaint that fun feels classic!
There is Still Hope
But do not despair just yet. Our new normal will be good for some of us who are still like me and younger. The good news is there are now more than enough interesting old cars in excellent condition, perfect for recommissioning to enjoy, at prices not far out of line with normal new cars. Also, with the World Wide Web, it is easier than ever to access resources if you like to tinker and want to learn to fix things yourself. Maybe social media can coexist with car clubs and driving events for those that want to kick the tires and enjoy the open road. I think our hobby is returning to its roots because “normal cars” have again turned into hard to love appliances that you throw away after 10 years or donate to your public radio station.
Eight years ago, I sent my 1948 MG-TC to a dear friend in New Zealand so it would be a happy car and live longer there with his Jaguars (and two daughters). My 1966 Corvair Corsa is now owned by another friend who is just starting his career as a pediatric dentist in North Carolina and drives it to work on nice days.
Yes, that shout-out in the photo above is correct. However, this gorgeous Ferrari 412P sold for a respectable $30.3M at the Broad Arrow Auction in 2023 — the high for the week! This was the last of the beautiful racers, designed by Maranello’s Edmondo Casoli, father of the GTO. I suspect and hope this segment of our hobby will remain stable and in stables.