Expert Mark Hyman Discusses Changes in the Classic Car Market
Pre-war collectibles are squidgy at the bottom
If this year's Pebble Beach auction results are any indication—and history suggests they are surely probative of wider market conditions—there's no doubt that the top end of the collector's car market is in fine shape, as people with more money than ever spend it like, well, like they have more money than ever.
A couple weeks ago, for instance, RM Sotheby's sold a 1962 Ferrari 250 GTO at auction here for $48.405 million. A 1963 Aston Martin DP215 crossed the finish line for $21.455 million, while Gooding and Company's 1935 Duesenberg SSJ hauled down a brow-moistening $22 million, setting records respectively for all Ferraris (including GTOs,) racing Astons, and American pre-war classics. That's the most money ever, folks, a moment worth noting.
But further down the scale, there is reason for concern. As Jonathan Klinger, Hagerty's auction reporter put it, "[s]elling three cars for $91.5M can hide a lot of misses." Less than optimal cars (the ideal being low mileage and original examples) fared relatively poorly. Even nice Ferraris suffered, with a sell-through rate across all the week's auctions a disappointing 53 percent, a virtually unprecedented decline from the 68 percent sell-through rate of 2017. This might be, Klinger suggests, the downward market correction Porsches experienced in 2016 and 2017. But one man's market correction is another man's ruination, especially for those less thick of wallet.
To get a more granular perspective, I interviewed Mark Hyman, owner of Hyman Limited Classic Cars of St. Louis, which just passed its thirtieth year trading. An obsessive car nut from childhood, Hyman's enthusiasm was fueled by his father's interest in cars, which, though mild by comparison, did extend to purchasing a vintage 1920 Hudson Doctor's Coupe, which remains in the family today.
Hyman came to Pebble to show his Portout-bodied 1938 Peugeot Darl'mat roadster (above), a beautiful deco two-seater commissioned by France's largest Peugeot dealer. It was designed by Georges Paulin, a noted designer of the day who would soon after become a hero of the French Resistance to Nazi Germany. Hyman's shop crew restored the Peugeot, but he explained they are primarily deployed getting cars out the door in good, safe, operating order. We spoke on the lawn at the Concours.
Jamie Kitman: Over your 30 years on the job, how has the collector car market evolved? What might the future of the hobby be? I mean, you can't help but notice walking around here that the average person is fairly senior. You represent the youth brigade here.
Mark Hyman: I'm 60 years old.
JK: That's what I mean.
MH: Well, here's the thing. I've been doing this 30 years, and I've seen an evolution in the market because of primarily demographic forces. But what I see is this. We keep 200 cars in inventory and we've been doing it for a long time. We are selling as many cars, if not more, than we ever have. But what we're seeing is that in different segments it evolves. When it comes to the postwar sports cars, there's still a tremendous amount of interest but it's more interest in cars that you can do events with and rallies with.
Many years ago I was into the Healeys and MGs and Triumphs, and there's less interest in those cars because people now that are now coming of age can't relate to them. So they're not buying them. But, the guys who have money don't want to buy an MGA, but they might want to buy maybe an XK150S roadster or something that's more advanced.
We're one of the few companies that trades heavily not only in post-war, but in pre-war cars. I've been a pre-war guy for many, many years. And the pre-war market for us is still great. Whether it's pre-war Bentleys, pre-war Ghosts, Auburns, Fords, Duesenbergs, Packards, what we see is the market is great, but the difference is this. Here we are in Pebble Beach, in Monterey, and we've gone to all these auctions and you walk in these auction sales rooms, and you don't see a lot of pre-war cars. The reason is simple. The people that are at these auctions are the younger guys, and they're not coming here to buy pre-war. That's number one.
Number two, the auction companies do a great, great job at what they do and their job is to market to as many people as they can. So it's easier to sell a bunch of Porsches and Ferraris and later model things to younger guys with a ton of money, and so that's what the auction companies represent, and that's who they cater to. And the pre-war market, as I said, is great. But it's different. What we find are the greatest pre-war cars, the really good Alfas, the really good Duesenbergs, anything that's really top of the line in its segment, there's a phenomenal demand for it and the values are greater than ever before… A twenty-two million dollar Duesenberg, that's not a bad sale for a pre-war car, right? So we see that the top of the top is better than it's ever been. The middle is spotty. In the middle I won't say that the cars have depreciated, but they have perhaps depreciated some. The middle, to me, represents phenomenal value for the money.
JK: An example being?
MH: Take a '34 Packard Super Eight Coupe Roadster that 15, 18, 20 years ago a guy would spend a quarter of a million dollars restoring it, which today would cost four to five hundred thousand dollars to do it. You can buy that car now for less than the cost of the restoration 20 years ago. That's a lot of car for not a lot of money, and they're great cars. They're very easy to own, they're very easy to drive, they're wonderful things that represent tremendous value. Where I see the pre-war market suffering badly, though, is the lower end pre-war. A '34 [Packard] Super Eight Coupe Roadster is a great car, it's basically the same value. But a '34 Packard Standard Eight four door sedan? Nobody really wants to buy it [anymore.] It still represents a lot of value, but there's not a lot of interest. Again, to say it quickly, the top of the top in pre-war is better than it's ever been, the middle is spotty but represents tremendous value, the bottom end a little tough.
JK: So there is still a demand for these top cars, but as the 70 and 80 and 90 year olds who are trading these things back and forth go on to the parking garage in the sky, what becomes of that? Doesn't there come a point where people just don't care?
MH: I think that whether it's real estate, art, stocks, or cars the best of the best is always great. So I feel very confident in the top end stuff. A great Picasso is a great Picasso, right? The best piece of real estate in Pebble Beach is still the best piece of real estate in Pebble Beach. And the best Duesenberg? You just saw it sell for $22 million.