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Thread: Interesting view on the Classic Car Market.

  1. #1

    Interesting view on the Classic Car Market.

    As I think many of you know I'm on Fantasy Garage mailing list because I love seeing the glorious cars that pass through there. Anyhow, this make for such interesting reading that I thought I'd share it.

    State of the Collector Car Market: Why Now is the Time to Sell
    January 2011

    by Derek Tam-Scott
    with input from Bruce and Spencer Trenery
    In early 2009, not quite 2 years ago, we wrote to you describing the correction in collector car values that was then occurring. Those of you who have been following the market are no doubt aware that values did come down some (markedly in some cases, but not catastrophically as in 1989-90), and those of you who have bought or sold cars since the end of 2007 are aware that it has been very much a buyer's market. Nevertheless, we have continued to transact a significant number of cars at Fantasy Junction during this period, and this has given us unique perspective on the market's health and activity.

    We are pleased to report that we have observed some encouraging trends in the collector car market in recent months. In summary, we have seen both the level of activity and the values of cars increase, and we feel that now is a better time to sell cars than it has been in some years. Buyers are feeling more financially stable, and indeed, many of our clients have reported that their portfolio of equities and other assets has returned to the same values as prior to the 2008 credit crisis. Additionally, many of our clients are concerned about inflation in the coming years, and see collector cars as concrete assets that can be transported and converted into a variety of currencies, and whose values will appreciate at rates equal or better to inflation. Therefore, buyers of collector cars are less hesitant about purchasing cars, and as a result, they can no longer afford to be as opportunistic because increasingly, hesitation means missing a chance to own a particular car.

    On the flip side, sellers are on the whole enjoying less aggravating and more rapid sales, particularly of high quality examples of cars. The recent auctions in Scottsdale, Arizona have reinforced our assessment of the collector car market's good health. Many individual cars did extremely well, yielding prices that approach or even exceed 2007-2008 levels. Overall auction performance was very strong too, with Gooding and Co. selling 121 of 129 lots (93.8%), and RM selling 172 of 180 lots (95.6%), both exceptionally strong figures.

    While we have seen increased activity across the board, it is, as ever, the highest caliber cars that are the most saleable. The cars need not be expensive or exotic, simply a very high quality example. Unrestored, original, preservation-type cars are particularly sought after as the cars become increasingly difficult to find, and as collectors become increasingly aware of the absolute unrepeatability and beauty of such cars. It is no longer possible to precisely specify the premium associated with this type of car as a percentage, as oftentimes, such cars are worth multiples more than a restored example. Additionally, high quality restoration work continues to be valuable to buyers, as does usability.

    Consequently, it is a great time to be buying or selling a collector car. If this market trend continues, then buyers will only become more numerous and competitive, making it a great time to buy. Alternatively, for sellers who have been hesitant to sell their cars because of concerns about the market, now is a great time to take advantage of the recent buying activity, and an associated vacuum of cars available in the market. At Fantasy Junction, we have sold an unusually large number of cars in recent weeks, and are finding that our level of stock is noticeably lower than usual. Consequently, if you are considering the sale of one or more of your collector cars, we would be delighted to consign your cars or perhaps even buy them outright.

    The timing to sell is particularly good now because the start of the event season is coming, and buyers are looking for cars to use in races, tours and rallies this year. Furthermore, the Euro has strengthened, which has brought more European buyers to market, and additionally, capital gains taxes continue to remain low. Lastly, since it is near the beginning of the year, it is a great time to sell in the event that it is necessary to recognize a gain on a car since it gives as much time as possible to use the funds prior to paying taxes.

    Our recent discussions with our clients and friends, both virtually and in person at our showroom and in Scottsdale, have reinforced why we have been in the collector car business for thirty-five years. In addition to the pleasure of interacting with such extraordinary cars on a daily basis, it gives us great satisfaction to forge meaningful long-lasting relationships with our clients, many of whom we can now call friends as well. What we pride ourselves most on at Fantasy Junction is our reputation for integrity, transparency, and expertise, and we look forward to facilitating your next collector car transaction.
    Andrew Macpherson

    Expert Z8 Inspections, with full support for both Z8 sale and purchases.

  2. #2
    Z8Mania
    Guest
    Andrew, thank you. Where do you see the vintage/ collectable car market going in the next few years?

  3. #3
    It is a very hard call, if the economy really stabilizes and recovers I'd say it should be good, however I'm not too covinced that will be the case, so I suspect the best that one can expect is it will remain flat, the worst is it could have a slide like it did the the 80's. However if you love what you own, I'd say keep it because you love it, and enjoy it without worrying too much about gain or loss. There is nothing better than getting in a lovely car and taking a great drive to get you away from the madness.
    Andrew Macpherson

    Expert Z8 Inspections, with full support for both Z8 sale and purchases.

  4. #4
    Z8 Addict Scott Pettit's Avatar
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    I agree with Andrew on this and as much as I am a follower of Fantasy Junctions sales, I think that some of what they say may be a bit biased as they are sellers and depend on consignments for that purpose.

    In my case, I have a car as an investment which was probably not a wise decision and a few vintage cars that I use for driving and showing (not competitively). The best of both worlds...?...Hum, I dunno. I just know that I enjoy the roads less travelled and the fact that I can look in my garage and pick a car via the eenie-meenie-miney-moe mothod of selection is cool.

    If I could sell the one aforementioned car, I have a few drivers in mind that I would love to own.

    Cheers,
    Scott Pettit
    61930
    Silver / Black

  5. #5
    Z8Mania
    Guest
    Scott, what car is that? (pardon me if youve mentioned it in the past).

    IMHO, it seems the economy is moving in different segments and the segment where those who can afford the truly collectable cars (say $500k+) has and will continue to improve and thus the market for these cars will continue. I think you have to look at these cars just like you say, #1 you have to love it. #2 you can try to see if you can make it an investment, but its got to be mostly about #1 with #2 being a bit of a curiosity.

  6. #6
    Z8 Addict Scott Pettit's Avatar
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    Jerry,

    I have PM'ed you.

    In general though, I think that it is not just about the high end cars though I do agree with you. It is also about the project cars, that can be had for a song, and sat on for an indefinite period of time until it can be restored and resold. In my area, you can't swing a short shifter without hitting a rusting classic with a For Sale sign in the window.

    If I had the $$$ and space, I be snapping up a handful instead of sitting here typing about it.
    Scott Pettit
    61930
    Silver / Black

  7. #7
    Z8Mania
    Guest
    Thanks Scott.