In a Year of Decreases, the Hagerty Market Rating Sees Its Biggest Drop So Far

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.

The Hagerty Market Rating just experienced its largest drop of the year, decreasing 1.26 points this month to its current value of 63.5. This is the lowest the Market Rating has been in over three years, and it shows no signs of slowing its descent.

The Hagerty Market Index, an open-ended stock-market-style version of the Market Rating, remained flat this month at 182.44, after a minor 0.1-point increase last month. The Hagerty Market Index has experienced an 11-percent drop from its high point in late 2022.

While monthly inflation reversed for the first time since May 2020, the Market Rating still managed to fall.
The main culprit was the Market Rating's auction activity metrics.

The Overall Auction Activity rating dropped 6.5 points this month, to its lowest value in over three years. Even with a negative-inflation boost, the Median Sale Price metric saw a 1.4-point drop this month due to the real value dropping a couple hundred dollars to $28,600—the lowest value since fall 2020 when not adjusting for inflation. When adjusting for inflation, the Median Sale Price is currently at its lowest value since we added this component to the Market Rating over 12 years ago.

An even bigger hit to the Market Rating came from the Auction Count of Cars Sold metric, which dropped a whopping 11.53 points this month to 88.47, returning it to January 2022 levels. This is solely due to the multi-year calculation window for this metric moving to a point where the staggering amount of online auctions each month is now considered normal by the calculation window. Expect this metric to see a smaller magnitude of movement in future Market Rating updates.

Much like public auctions, cars selling privately are trading hands for less money. While Average Sale Price managed to drop less than inflation did, the percentage of cars selling for above their insured values has dropped to 41.66 percent, its lowest value since early 2022.

Optimism among our industry experts managed to remain at an even 50 for the fourth month in a row. Auction analyst and industry expert Rick Carey is seeing an erratic market. While watching a series of European auctions last month, he noted poor performance spanning a wide range of values. Many lots saw little to no active bidding, some with no reserve, and not a single lot sold with a bid above a million in their native currency at Artcurial's Saint-Tropez and Bonham's Bonmont auctions. At the RM Sotheby's Cliveden House auction in the UK, the sum of high bids on unsold lot was 45 percent higher than sold lots. Rick commented that "there was money left on every auction table in June. 7-figure money everywhere I looked, and that's not a sign of a strong market."

Some of the poor auction performance on the high-end of the market could be chalked up to the auctions' non-traditional settings or high Value Added Taxes (VAT) on late-model imports, but we are seeing the high-end of the market continue to weaken in our insured book, as well.

The ratio of insured value increases to decreases for cars worth more than $250,000 has fallen 21 of the last 22 months. The current ratio of 2.17 insured value increases for every value decrease is the lowest in over three years. However, cars worth less than $250,000 are on a winning streak. After seven months of consecutive increases, the current ratio of 8.67 insured value increases for every value decrease is the highest since last fall.

While the high-end of the market appears to be softening, we will need to wait until next month's Monterey auctions to see how this effects real-world auction prices in the U.S. Stay tuned to see how Monterey's performance is reflected in the September update of the Hagerty Market Rating.

Until then, enjoy the driving season!

***

Check out the Hagerty Media homepage so you don’t miss a single story, or better yet, bookmark it. To get our best stories delivered right to your inbox, subscribe to our newsletters.