Expectations for the sale of classic car auctions

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This week, up to $400 million worth of classic cars will roll across the auction blocks of Monterey and Pebble Beach, marking the biggest test for collectible car markets and wealthy owners.

An estimated 1,140 classic cars will be sold at Monterey Car Week, an annual gathering of classic car collectors around the world. According to Hagerty, total sales are estimated to reach between $367 million and $499 million. The midpoint of that range was $388 million, down 18% from its third year decline in sales and a recent peak of $471 million in 2022.

The high end of the market is the weakest. RM Sotheby’s, Gooding & Co. The Monterey auction, held by Mecum, Bonhams and others, has traditionally featured at least half a dozen cars, priced at more than $10 million. There’s only one this year. It’s the least in over 10 years. This year’s average selling price has dropped to $473,000 this year, from $477,000 last year.

“Pebble Beach is an annual health check in the market,” said Simon Kidston, an advisor and dealer for classic cars. “Everyone waits to see what happens at Pebble Beach and then commits to a big decision for the rest of the year.”

According to the Night Franc Rugal Investment Index, classic cars have been declining slowly since the 2021 and 2022 pandemic rally, just like art markets and other types of collectibles. Overall, classic cars prices have fallen by 0.2%. It’s better than the 20% drop in the art market, but not as strong as gems (up 2.5%) or coins (up 13%).

Classic car dealers and auctioneers have denounced the global uncertainty that comes with wars in Ukraine and the Middle East and weaknesses in China. Higher interest rates are also a factor, increasing the opportunity cost of buying a classic car. This is because risk-free cash still earns more than 4%. Others point to stock markets that have skyrocketed over the past three years, while collectibles are relatively unattractive.

But experts say the biggest reason for the slowdown in classic cars is generational change. Having been equipped with a classic car market for decades, baby boomers have been aging or downsizing. The new generation of millennials and generals want a wealthy, collected, but less collected cars. The shift is expected to accelerate as an estimated $100 trillion will be passed from the older generation to the younger generation, providing fuel to the new kind of collector.

“It’s a big rotation,” said McKeel Hagerty, CEO of Hagerty, a classic car insurance, auction and event company. “Some of the old guard collectors are framing it. “The market is soft at the top edge.” But there is a lot of depth in this market.

That rotation left the market with oversupply and falling prices for cars in the 1950s and 1960s. Many baby boomers are trying to clean up their garages and sell them, while others are giving their children their cars.

Gooding & Co. is selling three Ferrari 250 GT California Spiders this week. This includes the most expensive week lot, the 1961 250 GT SWB California Spider, with alloy bodies, with the original hardtop estimated to exceed $20 million. “Cal Spiders” has become famous for the film “Ferris Bueller’s Day,” as they are known, but has been seen for a long time with a special sighting, which is rare at auctions. It’s very rare to see three in the same auction series.

Kidstone said it is likely that Alloy Body Calcumo had won between $25 million and $30 million a few years ago.

“It’s one of the best road cars of all time,” he said. “It has intrinsic value with origin, refinement, beauty and ease of use.”

Prices and demand for many cars over 50 years ago have fallen 20% to 30% since their peak, dealers and brokers say.

“It’s about what’s clearing the market and their ego can handle it,” Hagerty said. “It’s pretty amazing when it comes to a $18 million car and a $13 million car, it’s still a million dollar car.”

Hagerty said the decline in prices has led to more sales to the private market, not between buyers and sellers, rather than auctions. Sellers with prominent cars choose to sell personally because they don’t want to disclose their discounted sales prices.

“If you do that, then no one needs to feel embarrassed,” Hagerty said. “We see an incredible amount of private sales. Sometimes cars go out to the market and sell within hours and then they sell by the end.”

At the same time, auctions for new supercars are skyrocketing. Millennial and Generation Zers lists prices for rare cars from the 1980s, 1990s and 2000s. They also prefer practical cars at a more affordable price. Rather than leaving the 1962 $10 million Ferrari 250 GT SWB Berlinetta locked up in a private garage mahal, the new variety is hoping to be enjoyed from the 1980s onwards, BMW and every day, and not have to be repaired at all times.

In addition to the affordable exotics, young collectors also pay for supercars, especially the rare and very specific Paganis, Bugattis, Rufs and Boutique German Builder. The 1989 Ruf Ctr “Yellowbird” was sold by Amelia Island and was Gooding & Co. It was sold for a record $6 million.

Two years ago, the average model year for cars sold by Pebble was 1964. This year is 1974, with the distribution of bartels in the 1950s and cars from the 1980s and 1990s underestimating the other.

According to Hagerty, sales of modern supercars, defined as those from 1975 onwards, could overtake the sales of so-called “Enzo era” Ferrari (made before 1988) (made before 1988).

Some experts worry that the modern supercar segment has become overly bulging and speculative. It appears modern supercars are on the rise in discrepantly, like momentum trading in the stock market where retail investors buy on the basic premise that someone else will buy for more.

“If everything is reduced to something more sellable, the collection will be very superficial,” Kidstone said. “I don’t think collection should be dominated by investment. You need to be aware of the financial implications of what you buy. But it’s everything, not everything. Otherwise it’s just like Bitcoin.”

Here is the top lot for Monterey Car Week edited by Hagerty:

Gooding & Co. It is sold and is estimated to be over $20 million.

RM Sotheby’s sold and estimated at $8.5 million to $9.5 million.

Gooding & Co. It was sold and estimated at $8 million to $10 million.

Gooding & Co. It was sold and estimated at $8 million to $10 million.

Gooding & Co. It was sold and estimated at $7.5 million to $9 million.

Bonhams sold and estimated at $7 million to $9 million