Frequently our clients and extended network approach us at So Cal Classic to sell their car for them under our car consignment program. One of their first questions is: what is the current state of the market for selling a car? I answer this question in a nuanced way because it is first necessary to understand what market we are talking about.
The worldwide car market for most cars is considerably down in price since the market peaked in the COVID-19 years. A majority of those 25 to 50 percent increases during those years can be explained irrational exuberance. Many car enthusiasts were purchasing a number of collector, classic, and performance cars all while the supply chain could not get new cars to the dealerships. So the pent up new car demand was being re-directed to the used car market. To no one’s surprise, the bubble eventually collapsed once ships were able to unload their thousands of Porsches and Ferraris at Ports all over the world. This was not sustainable as this was a bubble and many other collectibles like sports cards, art, and watches also came back down to earth.
So, we should really look at overall car price change from pre-COVID to the present . From that perspective, the worldwide car market is relatively flat or slightly up. According to Hagerty’s Price Guide, the median price in the guide has returned December 2019 levels, accounting for inflation.
“It’s safe to say that for the majority of collector vehicles, the pandemic-era boom has completely receded.” – Hagerty
The bigger car market though is made up of many markets, such as the American Classics and within that, Ford Mustang classics from 1966 through 1970 for example. Within American classics is also 1940s and 1950s classics. Generally speaking, this market has continued to trend down over the last 10 years. Much of this is due to the generation of collectors that longed for these cars when they were young no longer have the purchasing power to buy these vehicles. Furthermore, subsequent generations have no interest in them as they are focused on JDM vehicles like the Toyota Supra or the Acura NSX. The generation (Gen. X) focused on JDM cars has most of the purchasing power and so these markets have gone up over the last 5 years. Think of the bigger car market as a stock market, made up of a variety of types of stocks like industrials, cybersecurity, retail, AI, etc. Many of these markets are going different directions all at the same time.
Final thought: Car valuation is driven by a few key factors that the car market does not account for: scarcity or rarity, condition, and options. To determine a car’s market value, there is a lot of work and expertise that goes into it. My perspective is that the overall car market is very healthy even though prices are down on many of the collector car market since their peaks.