Headwinds Continue for the Collector Car Market in December
The Hagerty Market Rating measures the current status of the collector car market in terms of activity or “heat,” directional momentum, and the underlying strength of the market. It is expressed as a closed 0-100 number with a corresponding open-ended index (like the DJIA or NASDAQ Composite). To learn more about how we calculate the Hagerty Market Rating, read here.
After no change last month, the Hagerty Market Rating continued its downward trend by dropping 0.58 points to its current value of 60.89. The Market Rating is now at its lowest point in nearly four years. While the classic car market has been contracting in the last year, it did not retreat enough to validate the prediction I made last year that the Rating would drop below 55. However, at its current rate, I am confident we will see 55 (and possibly lower) by the end of next year.
The Hagerty Market Index, an open-ended stock-market-style version of the Market Rating, dropped 1.08 points this month to its current value of 176.58. While the Market Index has decreased by 17 percent since its peak in December 2022, it remains higher than at any point in the six years prior to the pandemic boom.
The ratio of insured value increases-to-decreases for cars valued over $250,000 has dropped for 13 consecutive months, falling to its lowest point since early 2021. More mainstream and affordable vehicles have fared better through this cooling market, with their ratio of value increases-to-decreases actually increasing slightly this month. This was one of only two metrics to do so alongside our combined macro-economic indicator.
Values in the Hagerty Price Guide continue to fall. When accounting for inflation, the average and median #3 ("good") condition values are at their lowest points in over a decade. While many values in the price guide are decreasing, broad-market cars appear to be taking the biggest hit, contrary to their insured value performance outlined above. The Hagerty Hundred, a weighted average value for the 100 most popular vehicles insured by Hagerty, has dropped 12 of the last 13 months to its lowest value in Market Rating history. At the other end of the market, the Hagerty Blue Chip Index, which is comprised of the average #2 ("excellent") condition value of 25 seven-figure cars, only dropped slightly this month and has hovered around the high-70s for the past few years. Our analysts are gathering data for the latest edition of the Hagerty Price Guide, to be released at the start of 2025, so we will soon see if that downward trend will continue.
Another thing to look forward to in January is a reset of the auction calendar. Next month, the classic car market will go through its biggest test of the year as thousands of cars, spanning the entire price spectrum, cross the block at the Kissimmee and the Scottsdale auctions. Currently, though, the Market Rating's auction metrics aren't looking good. While the number of cars sold is still very high thanks to the multitude of online auction companies that have dominated the space, sales prices continue to fall. Down another 1.75 points this month, the Auction Median Price metric dropped to its lowest value to date at 24.54. This marks the 13th consecutive month that this metric set a new record low. Inflation is no longer the main culprit. Perhaps the January auctions will turn this around.
Expectations from our industry experts are mixed, with some feeling very optimistic about January while others are more reserved. That said, their average 0-100 rating dropped slightly to 49, just barely in the "contracting market" territory. We will need to wait until February to see if these big auctions had a positive effect on the Hagerty Market Rating or just added more fuel to its downward trajectory.
