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From the Summer 2021 edition of Collector Car Market Review



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From the Driver's Seat

Miscellaneous Ramblings from the Publisher


BOOM! The hits just keep on coming. Collector cars and trucks are hot, especially those under $30,000. Back in late 2019 and early 2020, we were warning about the multiple red flags showing in the market - longer onsale periods, over supply, soft prices, declining sell throughs, even auction burnout. Then came the pandemic. At first, the big auctions were cancelled, and people were unsure of where collector cars would fit in. The market was essentially put in a holding pattern, but then, slowly at first, values began to climb, and climb, and climb again. A big factor? It turns out that a collector car was a terrific diversion for many. Out of work, or working at home, that '66 Mustang offered a level of comfort and normalcy that could almost be considered therapy. I think this was a big part of the first surge, especially for the fixer uppers or mild restorations at the lower end of the market. It was something to do!

Then came wave two. Direct payments, boosted unemployment, a booming stock market, and skyrocketing home values (which come with those enticing equity lines), were all factors. Suddenly, lots of people were flush with cash and credit. Coupled with the steady opening up of life and a sudden renewed appreciation of YOLO, values climbed again. Where will it end? I have no idea, but I'm pretty sure this is not a normal market and at some point, normal WILL return. We try to shed a little more light on the subject in MarketWatch, so take a look there.

This tight supply extends to the late model market, too. If any of you have gone to buy a late model pickup in particular, you know that some of the asking prices out there are, well, crazy. But they're being sold at or close to those prices, and negotiation in many cases is non-existent. So, you swallow the pill or go without.

These market conditions may last for several more months. While some of the reasons are similar to the collector car market, others are not. Some of the biggest of those are the current supply and cost issues with important raw materials and parts--particularly computer chips--for new vehicles. Add America's seemingly insatiable demand for pickup trucks, and you get a seller's market nationwide to an extent and scale I have not seen before.

Finally, one last random thought. As a great technological shift occurs towards electric vehicles this decade, it will be interesting to see how resale values of the vehicles being sold now will hold up. Will they plummet due to obsolescence, or follow normal depreciation curves? These conditions have existed before in the automotive market - technology and performance developments in the teens, the thirties and the fifties/sixties significantly affected the values of previous generation vehicles. On the other hand, there may be enough consumers who will still prefer a good 'ol carbon-burning V8, so don't count them out.


All the Best,

John


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