Charted: Auction resales show a buyer’s market
We’ve been tracking the collector car market’s retreat with a keen eye over the last 18 months. After an almost unceasing march upward, its gradual return to rationality is a welcome sight for most. Except those who bought collector vehicles in the last two years with an eye toward reselling, that is.
Senior information analyst James Hewitt tracks a massive amount of data each month. One set from November, resales at public auction, caught his eye: a full 68 percent of cars—51 out of 75—bought at public auction in 2022 and then sold in November 2023 had negative returns. The average return for this group is -6 percent, while the median is -10 percent. That’s a precipitous drop from the beginning of 2022, when the average return for vehicles held for 24 months or less was 36 percent.
To put these stats into metal and rubber, take the ’57 Ford Thunderbird featured at the top of this piece. Purchased in January of 2022 at Mecum Kissimmee for $40,700, it sold for half that—$20,300—at Mecum Las Vegas last month.
This data isn’t isolated to particular segments, either. This 2017 Aston Martin DB11 Launch Edition was purchased at Mecum Kissimmee in January, 2022 for $181,500 and sold last month for $98k on Bring a Trailer.
This has broader meaning than merely articulating the hurt put on folks who sold after a short period of ownership, however. These data demonstrate the collector market’s rather quick transition from a seller’s market to one where buyers hold sway. That’s bolstered by the fact that the share of no-reserve auctions is at its highest since 2019. The frenzy is fully gone—more than a year ago, buyers began to sense a deal could be had if they were willing to be patient, and that may well have become the current prevailing market sentiment.
TBird has ’57 passenger car wheelcovers, for one. These have been becoming “more affordable” for years, as the group that coveted them ages.
The collector market for everything is dependent on nostalgia for that era. The golden era for ’55-7 ‘Birds was 30 years ago.
Speaking of BAT, I always laugh when I see comments like, “Nowhere to go but up” or “Will only increase in value.” These are obviously the shills, wishful thinkers, and newbs that helped feed the recent frenzy.
I’ve always said: the toughest part of buying a classic is determining the price.
It’s only worth what someone is willing to pay.
And like all investment bubbles and busts, there was no rational explanation for the Covid-era pricing.
Sad thing is that value used to be a side part of the discussion for true gear heads like most of us Hemmings readers. We love hunting for our project, wrenching on it, driving it, maintaining it, etc.. Auctions were a different group of folks. Now we’re saturated with it. I do agree that the age groups for cars does greatly affect value. I have watched beautiful model A Fords steadily decrease in sales price. I suppose that’s natural. What isn’t natural to a gear head is the over inflated bubble that surrounds some vehicles. It actually ruins enjoyment of the hobby to some degree. The resale market has all but destroyed the ability to actually drive and enjoy many vehicles.
I meant to say Hemmings and Hagerty folks.
Was it the resale market that “destroyed the ability to actually drive and enjoy many vehicles” or was it the people who are determined to constantly have something that creates an “us vs them” within the hobby? No one is stopping you from doing what you enjoy with your car.
You don’t have to work on cars to be a car enthusiast. “True gear heads” is a fallacy.
Your very last sentence is a fallacy. There are still a lot of “true gear heads” left who enjoy building, modifying, restoring and plain old wrenching on their and others cars who would beg to differ with you. Because you are equipped with deep pockets and buy a finished project to drive, show off and brag about, because you can and want to do so, is your business, but don’t attempt to demean the rest of us or the hobby by placing all of us in your category. There are quite a few of us, in this hobby, who can afford to buy a bright, shiny and expensive toy to display, drive and show off who prefer to bust their knuckles, get oil and dirt on their hands and clothes simply because we can and want to do it and love doing it.
I never said I buy finished projects. I work on cars, motorcycles, and all kinds of other junk regularly. There is nothing more fun than reviving an old car.
What I am saying is that just because a person does not have the means to build, restore, or plain old wrench on a car does not mean they are not a “true gear head.” This hobby can be inclusive, but so many people think that those who work on their own cars are better than those who cannot. Your enjoyment of doing the labor of working on things doe not elevate you above anyone. It does not make you a “true” anything, except a person who loves and cares for cars. There are gearheads and non-gearheads.
To say I or you are a “true gearhead” and the other is not is absurd. The world is divided enough. You like cars? You’re good in my book. There are enough people tearing down car enthusiasts. The last people that should be doing it are other car enthusiasts.
In the same time period, 401k and other investments haven’t been performing as well as they did pre-Covid either. Also, Winter isn’t a prime buying time, due to weather, transport, and venue: half the Country has its focus on other things besides top-down cruising & the like, right ? But if you’re only in the hobby to flip cars, you’ll be storing them for a while…until economic matters improve.
The good thing about high prices is it saves more cars from the junkyard.
I also don’t want to put more money into something than it is worth.
I’ve owned a 57 Bird since 95. It could fit into a category of “resto-mod”. Since I bought it I added a 429, AOD A/C 4w disc brakes, cruise, Bluetooth, and more. I wouldn’t want to tally the money spent (not invested). It wasn’t bought as an investment. I really don’t care what I’d get for it today. I just enjoy working on it and driving the wheels off of it! The smiles from people and the thumbs up makes me want to drive it more. Don’t sell it! Drive it!
With all investments you can , and should , take the time, do your research etc. Still ,ultimately your making an educated guess at best. Then there are guys reading the daily racing form at Aqueduct who think they’re doing likewise and thinking the smart moneys on. -” There is no such thing as a sure thing. That’s why they call it gambling.” -Other than that – “If you ain’t got it ,don’t spend it.” What else is there to say?
Of all the Thunderbirds this is the generation I would want the most.
At 15, I bought a wrecked ’56 T-Bird in 1967 for $600.00. Cut wheat to pay for it and sacked groceries for the $600 needed for big body work. But, beautiful when finished. I drove it all the way through university – 7 years, and bragged about quadrupling my money when I sold it after seven years for $2,400. I put 183,000 miles on the car and loved every minute of it. I’ve followed pricing and yes, have watched prices fall over the last 10 years. One can now purchase a nice ’56 with known and relatively low miles for high $30K’s. I’m so tempted but, now 72 and have a C8 in the garage. A friend I discussed it with said, “You don’t need another sport car.” I replied, “I didn’t NEED the first one!” Buy what you love and yes, drive it!
I have a explanation for the big increases we saw. Like so many mentioned about the demographics and nostalgia being linked, our country saw record 401k balances and record numbers of people retiring during the “run up” period. In my opinion we saw a lot of demand driven by recent retirees with fat 401ks. A lot of folks “rewarded” themselves and bought the car they once had or always wanted. Most were not very knowledgeable about value or even what they were actually buying. They just wanted the look/nostalgia of the car they coveted back then. Then there is the pervasive “auction hype” that says “buy now while you can”. So they jumped in like teenagers at a pool party! Now that our economy has slowed and the Feds have tightened monetary policy those fat 401ks took a big hit. We are seeing a return to normalcy (whatever that is). Last year I attended the Mecum Kissimme auction as I have for more than a decade and I saw and spoke with folks who were in this situation.
Mark T Cronk I fit your theory, kinda: I retired in early 2022 and “rewarded” myself by buying a hot rod engine for my 996. I’m knowledgeable enough to know that I’ll never see a return on that money, but then it was an investment in driveability and reliability, not ultimate dollar value. In that regard I’ve made out like a bandit.
But you have the 401K values backwards. Mine dropped like a stone in early 2022, as I suspect did most others. This year has been the one where it got back to what it was in 2021.
Cars aren’t investments. Even the high rollers would probably admit that they lose money when all expenses are taken into account. The lucky ducks that bought Ferrari GTO’s for $7500 in 1970 are the exception, not the rule.