Month in Motoring, July 2024: “The Times They Are A-Changin”
I never considered Bob Dylan a collector car prognosticator. While he wasn’t thinking about car values and popularity, the title of his song aptly describes the current collector car marketplace. July continued to see a trend of slowing sales across all marketplaces and models. What does this mean for you? It depends on where you are in your collector car journey. Are you a holder, an investor, a collector looking to add to your current stable, or maybe a seller?
With sales down, interest rates up, and the continued graying of the hobby, there’s a lot to consider. But first, you must determine who you are.
Are You a Holder?
A holder is a car owner who loves their collector car. You enjoy working on it and have had a passion for your car for years, most likely around a specific brand or model. You might belong to a club, and a major appeal of your car is that it connects you to other like-minded owners. Your car is part of your net worth but not a critical asset. The bottom line is, you are connected to the hobby. It’s an important part of your life.
What This Means for You
If you are a holder, the current collector car market doesn’t mean much. The fact that cars are selling slower and for less money might be a social benefit. It adds to the conversation at the Saturday get-together with your car friends. Everyone compares notes on the sales they have seen and is happy they are not selling, but at the same time, happy they aren’t looking to buy as the current cost of living has priced them out of the market, even with the lower selling prices.
Are You an Investor?
An investor looks for opportunities. Owning a collector car is about the opportunity to make money. You are not tied to a specific make or model but to the idea of profit. The social aspect of the hobby is only superficial as you see collector owners as customers, not peers. Your main social network revolves around others who like making money on all types of assets, such as stocks, art, and real estate. Collector cars are important, but you wouldn’t lose any sleep if your garage was empty.
What This Means for You
If you are an investor, you don’t care about the slowing market either, unless you have a few cars you need to sell. If you do, the current market is very concerning. The slowing market means smaller returns, if any at all. The volatility also makes it less likely you will be investing in cars as the carrying cost is too high with increased interest rates and the underlying weakness of the market. Unlike the last 10 years where you made money on nearly every car, no matter what you paid, now you might look to put your investing dollars elsewhere, possibly in gold until the heat is turned down.
Are You a Hybrid Collector?
The hybrid of the two is the collector looking to add to the collection. When looking to add, there are lots of things to consider. It might be one car they have been searching for, or something pops up like a vintage fire truck or an antique motorcycle. They enjoy other collectors while presenting their cars to clubs. They don’t like to lose money on their purchases but understand that it’s not all about the money. They do sell from time to time. The collection might have significant value, but it’s not critical to their way of life. They love cars and intend to leave their collection to the next generation to continue the legacy.
What This Means for You
Maybe the best position to be in is the hybrid collector. With the market down and continuing to slide, it is an opportunity to add to the collection. You might pick up the phone and make a few calls to collectors who have cars you wish you had. Most will say not for sale, but a few will say yes. And if you’re paying cash for your cars, the high interest rates don’t enter into your decision. With the holder and the investor no longer competing when buying, the current market is a great opportunity.
Understanding Your Position
Understanding your position in the collector car chain is important to your financial and mental stability. But like all things, the current market will change, and opportunities for both buyers and sellers will come back.
No question, the only bad position to be in is if you need to sell. Next month’s “Month in Motoring” will address those of you that find yourself in that position. And it is not all bad news.
Happy motoring!
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