The Economy and the Classic Car Market: What Can We Expect in 2020?
Some experts say it’s too soon to tell, others say a drop is already here.
Ever since classic cars really took off not just as toys but investments in the 1980s, one thing has been certain: the ebbs and flows of the collector vehicle market have often been linked, at least partially, to the strength of the broader economy. What's in store for the classic car market in our current troubled times? We asked three experts, including Wayne Carini, host of MotorTrend's "Chasing Classic Cars," for their opinions on where the car market is headed amidst broader market uncertainty. Their responses are below in their own words, as told to Automobile features editor Rory Jurnecka, edited for length and clarity.
Wayne Carini, collector car dealer, owner F40 Motorsports, host of "Chasing Classic Cars"
"We've got to see what's going on. Hopefully the market will stabilize. I think there are certain cars that you have to watch to see where they go, and the market sort of follows that. Some supercars, let's say, McLarens and things like that. I think Ferraris are a good barometer, Daytonas and 275s, what's going on with those in the marketplace? I think that everything revolves around those because there's so many of them. And listen, if you have a [Ferrari 250] GTO, I don't think it's going to affect the GTO market. In other words, one comes up for sale and it's $75 million. There's a guy and it's not going to screw up his lifestyle to spend $75 million on that car, he's going to buy it. When something comes up for sale that's very rare and unusual, I don't think it will be affected by the market."
"Usually, when the stock market is tanking, that's when you see cars starting to go up because people still have money. They didn't throw all their money into the stock market, so now the money that they've got still accumulating, they say 'What do I do with it? Well, I need a hard asset, I need something I can enjoy and look at and it'll give me some pleasure, because I look at the screen on my computer and there's no pleasure at all. '"
"We haven't seen anyone pushing the panic button and we haven't seen any fire sales. I think that right now it's way too early to understand what's going to happen. I think the one thing that might get people to think about long-term is if we lose two more shows, Pebble Beach and Concours of America. Everything that Pebble Beach represents in the automobile market, all the car shows, the camaraderie and the auctions, then things may switch around a little bit. I think the love of automobiles is still there, it will always be there and now we've just got to ride the waves. "
Michael Sheehan, collector car broker specializing in Ferrari, owner of Ferraris-Online.com
"[Compared to 2014, 2015] prices are off, depending on what kind of car you're talking about, around 30 to 40 percent. So, if you're talking [Ferrari] 330 GTCs, it's about 35 percent. Daytonas are off about 35 percent. The older the car, the more the drop simply because of demographics. The type of guy who wants a 1933 Packard is very different from the guy who wants an F40."
"This is a black swan event. The U.S. economy is losing a trillion dollars a month, that's a lot of fucking money."
"The buyers for these cars have been the baby boomers. They are 60 to 75 years old, and guess what? They are leaving the market in droves. When you're 75 years old, you're not thinking about your first Ferrari. You're thinking about your retirement fund, your grandkids, you were thinking about going on a cruise but you can't do that anymore."
"If you want to sell it, it's worth less, it's that simple. It doesn't matter if it's a Dino or a Daytona Spyder or a Testarossa. And I'm speaking Ferraris, but the same applies to a Miura or a Gullwing. Gullwings were in the high $1 million range and now they've dipped below $1 million, they're 30 to 35 percent off."
"The rich get richer and the poor get kids. We have a client that's worth a lot of money, he's owned a lot of cars. He three or four months ago called and said he wanted to buy one of the best of the best and gave me a list of cars that includes a [Ferrari] 250 Testa Rossa, etc. And his theory was, for the sake of the number, a 250 TR was $40 million and the market's off by 30 percent, today they should be $25 million. Well, that's a nice theory and maybe it's true, maybe it's not. I don't know. But the cold, hard reality is, I made the calls and if you're [a wealthy collector], you don't need the money. So, maybe it is off, but you don't care, it's not for sale. The top end will be relatively unaffected because the guys who own 250 GTOs and 250 TRs, they have enough money to do whatever the fuck they want. They don't need to sell."
"I got a call from a guy owns a [Ferrari] 512 BB, he owns a restaurant. You can see what his financial situation is. Make a long story short, he wants $329,000 net in his pocket. Dude, you missed the party. It's not worth $329,00 anymore. Now it's worth, maybe, maybe, maybe if you're lucky, $229,000. So basically, we're getting endless calls from baby boomers who want to sell. The biggest problem is getting them in the real fucking world on pricing. About 90 percent of them are in fantasy land. Everybody else's car has dropped in value, but theirs is worth more."
"The big change in the market has been Bring a Trailer. We have a [Ferrari] 575 that's spectacular. It's a 575 that has every possible option. It has shields, calipers, the modular wheels, race seats, the quilted shelf, the carbon kit, the Fiorano suspension. It hits all the bells. We've had it for sale for about four or five months now and the owner keeps chasing the market down. We finally talked him into putting it on Bring a Trailer, it did 90 grand and he turned it down. So now it's on our website at 89 grand and I'm trying to get $85,000. The punchline is that 30 days ago, he could have had $90,000 and 120 days ago, he could have had $105,000. So, he's chasing the market down."
"The [traditional] auction houses are successful because you get 500 or 1,000 people in a tent and all you need is two people who have big egos and big wallets who want the same car. Whether it's a [Porsche] 928 that's worth 45 grand or a [Ferrari] Daytona spider that's worth $2 million. You need two guys whose wallets and egos are bigger than the market. Because of the virus, that no longer exists. You can't have a room full of people. The auction houses in my opinion will go back to the fill-a-room-full-of-people-and-pass-out-free-drinks format, but for now they're stuck competing with BaT. And BaT has a head start on you."
Randy Nonnenberg, founder of online car auction website BringATrailer.com
"We've been pleasantly surprised that people are still very interested in bidding, sometimes aggressively, on interesting cars. We've seen an increase in daily traffic and an increase in traffic per listing, I think many online and media properties are seeing that sort of thing with people at home. Commutes have been taken out of the ball game and people are living much of their life online."
"Basically, what we're seeing is for some subset of the population, they may have an urgent need to sell something. If they do need to sell something right away, we're obviously a good outlet for that because we move very quickly, we don't need to wait for a summer time event or something like that, we're ready to rock and roll and get it moving. I think that's balanced out by those who want to wait and see a little bit."
"That's the great thing about BaT, that you can see real-time what the market is doing. What people are bidding on, what they're not bidding on, what's selling, what's not. I'm watching BaT right now and there's a Ford Country Squire Wagon selling for $31,000! There are still the anecdotal bidding wars, that hasn't really changed."