The 2020 Collector Car Market: Where We’ve Been, Where We’re Headed
It’s not all doom and gloom … yet.
What a difference several months can make. In January 2020, when we once again made our annual pilgrimage to the Arizona desert for the trove of collector cars being sold at several big-name auctions, we packed into crowded sales rooms, stood shoulder to shoulder with our fellow enthusiasts and enjoyed laughs, food, and drinks. It was business—big auction business—as usual. Sales were down slightly, a continuation of a healthy market correction from its recent 2016 peak. By the time March rolled around, the COVID-19 warning signs were on the wall, but the Amelia Island Concours d'Elegance and its associated auctions went on as scheduled, with good results, pointing to a reasonably strong 2020 collector car market.
Just a month later, at the beginning of April, it was clear that that this new virus would have a far larger impact to our personal lives than anyone could have imagined. Towns, cities, states, and countries around the world closed to business, locked their gates and kept citizens home. The unemployment rate skyrocketed with droves of worker layoffs, and many businesses, both small and large, wondered how they'd meet payroll if the bad news kept on coming. In the collector car world, enthusiasts watched their favorite events and gatherings fall victim to cancellation, culminating even in the loss of Monterey Car Week in August. The stock market began to plunge. Was the collector car market headed for the biggest crash it had seen since 1989?
Initial Worry Leads to Calm
As it turns out, that market crash still hasn't arrived. The stock markets' rebound to near the record levels they started the year with, and optimism about a quick job market recovery have helped, to a degree. MotorTrend's Chasing Classic Cars host Wayne Carini, who we spoke with at the end of March, said panic sales weren't yet happening among elite collectors. And in the same article, Bring a Trailer founder Randy Nonnenberg pointed to record traffic levels on his online car auction site, with no meaningful slowdown in sales volume.
Bring a Trailer Reaps Rewards
Speaking of Bring a Trailer, with the cancellation or delay of many high-profile, in-person auctions, the popular online auction site has emerged as a winner. Bring a Trailer says it listed 1,229 vehicles for auction on its website during the month of May 2020, including a 1969 Ferrari Dino 246 GT that sold for a strong $395,000 including commission. Since then, BaT has also sold a 2015 Ferrari 458 Speciale Aperta for $481,000, a 2019 Porsche 911 GT2 RS Weissach Edition for $321,000, and a 2006 Ford GT Heritage Edition for $385,000. Clearly, wealthy car shoppers are still shopping.
Traditional Auction Houses Play Catch-Up
After postponing or canceling several sales, many of the big-name traditional auction houses are scrambling to quickly adapt to an online-only format with mixed results.
RM Sotheby's has shown strength here with its extremely quick shift of the annual Palm Beach auction to an online-only format in late March, despite its still-low 69-percent sell-through rate. Next up for RM was setting a new record for a car sold at an online-only auction with a 2003 Ferrari Enzo netting $2.64 million at its Driving Into Summer auction. Other notables at this auction included a 1985 Ferrari 288 GTO ($2.31 million) and 2017 Ford GT ($836,000), but at 61-percent sell-through, the percentage of auction cars that met reserve prices and sold to new owners wasn't up to par with RM standards. Still, give credit to RM for its latest European Essen auction, which recently ended with a 91-percent sell-through rate, thanks in large part to roughly half the cars sold being offered without reserve.
Barrett-Jackson, which typically prides itself on near 100-percent sell-through rates due to a stringent no-reserve policy on most of its consigned collector cars, suffered a 53-percent sell-through at its first online-only auction in May. Just 45 cars of its 84-car inventory changed hands, with a 1963 Chevrolet Corvette "split-window coupe" resto-mod the top seller at $357,500. Barrett-Jackson is planning yet another online auction for July.
Bonhams has just held its first online-only auction in England, with a decent 73-percent sell-through, but its first U.S.-based online-only sale will be from Los Angeles in August, not from The Quail in Carmel Valley. Santa Monica, CA-based auction house Gooding and Company has been very slow to transition, with its first online-only event dubbed Geared Online, set for August 3, just weeks before what would traditionally be its final sale of the year at Pebble Beach.
An Emphasis on Modern Cars
One constant that we're seeing is the new online auction format being particularly helpful for more contemporary cars. More modern, low-miles vehicles are bought and sold largely on ownership history, build sheet options, and service records. Older classics, on the other hand, have faced challenges, as nitty-gritty details regarding lengthy restorations, period-correctness and previous accident or corrosion damage on classic vehicles are more difficult to ascertain in an online format, which can make these cars more difficult to sell without an in-person expert opinion. That's doubly true for cars worth several hundred thousand dollars, and especially those over the million-dollar mark. The challenges of physical interaction in the COVID-19 world, especially for aging baby-boomer buyers that still make up most of the market, are becoming clear. We expect that many high-dollar classic car sales will transition to private sales with specialty brokers whose reputations will help sell top-level classics.
Meanwhile, expect more traditional auction houses to lead their online-only auctions with more late-model supercars. Gooding and Company's early consignments for its August auction include a 2003 Ferrari Enzo, 1995 Ferrari F50 and 1992 Ferrari F40. Barret-Jackson's July online sale is led with a 2018 Ford GT, the first of that model year to come to auction.
The Rise of (Once) Affordable Sporty Cars
You may have heard about the 5,600-mile 2000 Honda Civic Si that sold for a huge $52,500 on Bring a Trailer recently. That's certainly an anomaly for the model, but we're seeing similar cars bring extraordinary amounts. Other Bring a Trailer stars include a 1987 Volkswagen Scirocco at $37,000, a 1984 Volkswagen Rabbit GTi at $26,250, and a 2008 Honda S2000 CR at a world-record $80,325. We'll continue to follow this trend.
What Does the Future Hold?
Obviously, no one knows where the market goes from here with any certainty. Several auction houses seem to be holding out hope for a return to live events scheduled for September and later. Mecum is even optimistic about a live auction in North Carolina in late June, though it will only allow registered bidders inside—no spectator passes will be sold. Meanwhile, a mix of online auctions and private sales activity will continue to set the bar, as will progress on containing the virus and the health of the global economy. Be sure to check in regularly for auction and other collector-car market coverage.