What the Heck’s Going On with Classic Cars?

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The asset class of Beautiful Machines heads south.

Prices of collector cars fell again, according to the April report by Hagerty, which specializes in insuring vintage automobiles. After a tremendous price surge that peaked in 2015, they’ve been ratcheting their way down ever so slowly. But it adds up after a while.

The “Hagerty Market Rating Index” – which tracks the “heat” of the market – fell 0.33 points to 66.65 in April. The index, which is adjusted for inflation, is now down 7.4% from its all-time high of 71.99 in May 2015. Here are more clues from Hagerty’s report:

The number of owners expressing the belief that the values of their vehicles are rising continues to fall. The number is at its lowest since November 2013 for owners of mainstream vehicles and at its lowest since May 2012 for owners of high-end vehicles.

Expert sentiment dropped for the first time since November. Market observers have cited that many cars with prior auction results have been changing hands for less money than in the past.

Then there is the price-based “Hagerty Market Index.” It fell 1.44 points to 161.06 in April, down 10.8% year-over-year, and down 13.3% from its all-time high in September 2015 (185.86).

The Hagerty Market Index, which is adjusted for inflation and is based on changes in dollars and volume of the market, fell about 20% during the Great Recession, then surged 75% on an inflation-adjusted basis to its peak in September 2015. Since then, it has been heading back down. It has now fallen nearly 25 points from its peak, exceeding its point decline during the Financial Crisis:

The data includes the results from the collectible automobile auction on Amelia Island off the coast of Florida on March 10-12. The auction had been hyped with the usual fanfare to stir up the animal spirits’ desire for beautiful machines.




“In recent years the Amelia Island Auctions have quickly emerged as a significant indicator for the public auctions segment of the classic car market,” Jonathan Klinger, the spokesman for Hagerty, told Bloomberg before the auction. “It is no longer just Arizona auctions in January and Monterey in August that matter.”

The auction was going to be hot. Bloomberg:

According to Hagerty predictions, the final cull will be $135 million to $140 million among all five auction companies that will sell there this year (RM Sotheby’s, Gooding & Co., Bonhams, Hollywood Wheels, and Motostalgia).

The article showcased “the highest-priced individual standout cars among the lot,” and I added in bold what then happened to them at the auction:

  • 1957 Jaguar XKSS Roadster, expected to take $16 million with Gooding & Co. (did not sell)
  • 1928 Bentley 4 1/2-Litre Le Mans Roadster, expected to take $6.5 million for RM Sotheby’s (did not sell)
  • 1950 Ferrari 166 MM Barchetta Spider, expected to take $8 million, for RM Sotheby’s (did not sell)

Yep, the top three most hyped cars didn’t sell! Rounding off the top ten cars, there were these seven gorgeous machines, according to the New Atlas (results in bold):

  1. 1961 Ferrari 250 GT SWB Berlinetta (did not sell)
  2. 1937 Bugatti Type 57S Cabriolet by Vanvooren (sold for $7,700,000)
  3. 1998 Porsche 911 GT1 Strassenversion (sold for $5,665,000)
  4. 2015 Ferrari La Ferrari (did not sell)
  5. 1995 Ferrari F50 (sold for $2,640,000)
  6. 2015 McLaren P1 (sold for $2,392,500)
  7. 1956 Maserati A6G/54 Coupe Series III by Frua (sold for $2,365,000)

In total, sales didn’t hit $140 million. Instead they dropped 13.4% from last year’s total to only $121.3 million, even though 14% more cars went through the auction this year. And the average price, according to Hagerty cited by New Atlas, plunged 21% from a year ago to $332,345.

New Atlas blamed the weather and “all the disparate factors that influenced the weekend and the sale” – such as the absence of a Ferrari 250 GT SWB California Spyder that sold last year for $17.2 million or the Jerry Seinfeld Porsche Collection which sold for $22.2 million last year, when the market was still hot – and so the result “doesn’t mean much.”

Indeed, myriad factors impact auction results, including the mix of cars going through, but also what collectors are willing to buy and what prices they’re willing to pay. The fact that some of the highest-priced cars going through the auction failed to sell may have something to do with it.

In the grander scheme of things, and as a red flag, this is another asset class that has enormously benefited from asset price inflation, stirred up by the Fed’s well-targeted monetary policies since the Financial Crisis. But prices peaked shortly after QE ended and have ratcheted lower in tiny increments. While stocks got a huge boost since the US election, classic car investors appear to not have gotten the memo – or perhaps they can see the writing on the wall, with sellers becoming more eager and buyers more careful?

The American economy has split in two, but the aggregate numbers of wealth and debt obscure the profound risks. Read… So Who Are the Debt Slaves in this Rich Nation?




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  73 comments for “What the Heck’s Going On with Classic Cars?

  1. Flying Monkey
    Apr 17, 2017 at 1:29 pm

    I’ll call Janet to crank up the printing presses again. That should correct the situation.

    • Frederick
      Apr 17, 2017 at 2:19 pm

      It will send gold over 2000 as well and fast Come on Janet Make my day

  2. kam
    Apr 17, 2017 at 2:36 pm

    And my 28 Studebaker coupe is worth exactly what I paid for it 15 years ago. Someday if I want to waste some money I will take it into the shop and penny weld the rust out of it.

    Don’t buy or fix up old cars/classics if you want to see your money again.

  3. Dan Romig
    Apr 17, 2017 at 2:41 pm

    Many of these fine, history-making performance machines that are bought and sold at auctions are never even driven, but showcased as art; which they are, of course.

    The above mentioned 1961 Ferrari 250 GT (and the other cars listed) sure would be a kick to take around Brainerd International Raceway or Road America, but I wonder when the last time it was let loose on a road or track.

  4. akiddy111
    Apr 17, 2017 at 2:46 pm

    I am guessing that you feel that there is a reasonably solid correlation between the classic car price peak and the end of QE.

    You recently reported on a rollover in peak prices for luxury condos in Miami-Dade that also occurred in 2015. That could also be the case in the high end condo market in Manhattan.

    I think Petunia recently mentioned a roll over in the price of high end fine art paintings.

    It would be interesting to see if classic cars, luxury condos, and high end paintings rolled over in and round the same time. That would provide a relevant predictive signal to me.

    • robt
      Apr 17, 2017 at 4:48 pm

      Collectibles traditionally signalled the beginning of the end of the economic cycle. Bonds, stocks, real estate, collectibles, then reverse. Then begin the pump again, in the past known as ‘open-market operations’, now called QE-something.
      In the case of antique cars, like art the boundaries are expanded to include more and more borderline or questionable objects that qualify as collectible as the mania reaches its zenith.
      In Toronto, I’ve noticed local realtor anecdotal comments about the market feeling ‘a bit soft’, realty-speak for a ‘permanently high plateau’.
      When I was in the biz many moons ago, about this time of year, with a massive boom that saw prices go up 50% in months (with 15% mortgages!), the phones wouldn’t stop ringing. Then one day, they just stopped – for almost 7 years.

      • Ronnie
        Apr 18, 2017 at 8:42 pm

        The comfort of reality.
        Thank you. No real estate for me. Will retire on a house boat and just float around, while I wait for God. If you want it, you have to collect…no postage.

  5. TJ Martin
    Apr 17, 2017 at 2:52 pm

    OK Wolf .. this is a subject on which I am well informed [ cars and classic cars in particular are an avocation of mine since my youth .. having owned several classics in the past as well as maintaining an interest in both the classic and contemporary automotive world as well as business ]

    So here’s my take which I’ve expressed here in the past when I think the system was mistaking me for spam and blipping my comments into the digital netherworld / void .

    1) A heck of a lot of extremely prominent ( some celebrity ) and wealthy collectors are dumping much if not all of their collections keeping the profits rather than reinvesting them into other classic cars , art etc . All of which leads to a glut in available classic cars for sale as well as telling me they [ the folks selling off ] know something we do not . Knowing some of them personally … without divulging any secrets … trust me … they do .

    2) The classic car market has been in an extreme bubble rivaling the real estate bubble for the last five years if not more . Suffice it to say when a bog standard who cares 1979 911 sells for Ferrari money , classic VW Micro Buses sell for Porsche money and a FIAT Dino exceeds the value of a Ferrari 365GTC/4 V12 ten years ago you know something is amiss

    3) Without mentioning any names suffice it to say those ‘ invested ‘ into what has become an ‘ industry ‘ [ auction houses etc ] have been hyping the ‘ investment ‘ potential of classic cars both thru TV websites etc to the point of propaganda in order to bolster their business interests

    4) Have you ever attended one of the high end classic car auctions ? If not let me tell you … a whole lot of ( free for approved bidders ) alcohol addled ego induced decisions have been made over the last decade or so leading to a multitude of Buyers Remorse once the PDVS – [ post decision validation syndrome ] – has passed ] leading me to believe a lot more restraint .. even among the wealthy is also affecting prices and sales

    So slightly off topic but not really . Several years ago while still with CAR magazine the late great automotive / motorcycle and audiophile writer LJK Setright set another bar for which to be concerned about when it comes to new cars . He said … and sorry but I can only paraphrase his words ;

    ‘ When you start seeing a proliferation of over the top wretchedly expensive to the point of vulgarity cars being built and sold attaining unattainable acceleration numbers and terminal velocity [ e.g Super/HyperCars ] or are simply a display of external wealth devoid of substance luxury automobiles you know the end is near for this present state of affluence . Why is simple . The more dire the circumstances become the more the conspicuous consumer buys in order to prove to the public at large his or her ‘ supposed ‘ wealth ”

    Anyway Wolf … thats my take on things .. Ciao

    • azdude
      Apr 17, 2017 at 3:19 pm

      Your classic car dumping friends know intuitively to dump whatever assets for whatever they’ll fetch because they know they’re going to need every dollar they can get their hands on.

      They’ll be glad they did. And you will too.

    • Apr 17, 2017 at 3:19 pm

      Thanks. Great read.

      • d
        Apr 21, 2017 at 5:44 am

        The only classicin that list is worth knowing about is the 911 (And that price is worrying), the Homomodel is a curse, as you cant park them anywhere, and unless you are at least a formula ford/pacific driver you wiil brake it, or it will brake you, as they are a very unforgiving motor car. The Std 911T is unforgiving enough, to the non driver, which is why they are so few in number these days.

        Many peopel, Laugh at pushes, as they have small HP. The point with Pushes, is that if you know how to drive, you can use all of that HP, in Every gear, on the road. And you never seem to run out of HP, for the conditions.
        \
        They made some Auto 911s for the American market, putting an Auto in a 911, is an insult to the rest of the car.

    • Dan Romig
      Apr 17, 2017 at 4:14 pm

      Yes, and very well stated TJ. I watch the NBCSC’s Mecum Actions show occasionally, and I am blown away by the prices paid for straight-stock late ’60 US muscle cars. There are some cars of this era that have been modified with disc brakes, independent rear suspension, etc and these cars make sense in a drivable/status perspective, but who wants to spend half the price of a decent house for a drum-braked solid beam rear axle sled?

    • Al Loco
      Apr 17, 2017 at 4:30 pm

      Great input. If I knew what I know now 15 years ago I would have scooped up every air cooled 911 I could get my hands on. I cannot believe how crazy the prices are. I recently had an itch to buy a VW Thing to bring back my childhood Caribbean island days. My jaw dropped at how much clapped out bondo buckets were demanding.

      The over inflated market has also brought up the value of less desirable cars (like my 1968 Impala) because the average guy who wants to drive a cool muscle car can no longer afford a Camaro Z28 or Chevelle SS. I purchased in 2012 and would make a decent buck if I sold or if I hadn’t put a boatload of cash into it making it more fun to drive. Thing is I only buy classics to have fun driving, not as an investment.

      • Miatadon
        Apr 17, 2017 at 6:30 pm

        I think old Porsche and Mercedes roadsters have gone up in value so much may be because those companies are still making cars, and also because wealthy people in Europe want them.

        • Al Loco
          Apr 17, 2017 at 7:31 pm

          I think it could have to do with the kids who had posters of them on their walls in the 80’s and can afford a classic car loan on them. My credit union will give someone with good credit a classic car loan at %2.9 with an appraisal. Just like housing cheap financing most likely pushed prices up. People look at you sideways when you say you have a loan on a classic car but they depreciate far slower even in a downturn than a new car.

    • tony
      Apr 17, 2017 at 5:14 pm

      tj martin good write makes a lot of sense people on the street involved in any buisness or hobby are the best to get real dope from

    • economicminor
      Apr 17, 2017 at 8:31 pm

      I live in an area where there are many thousands of Classic Cars. Not a lot of the super expensive ones you documented in your piece but people buy and sell them for as much or more than high end new cars. Lots of really nice street rods around.

      The Gen-Xer and Millennials weren’t brought up with cars you could work on. Many have little interest in a car other than as transportation. Lots them don’t own one. My generation had a wrench in our hands early. We could tweak cars and race them and love them.

      What I see coming for Classic Cars, out of any other financial phenomenon out there, is that in a few years those of us who turned a wrench and built our own rides are getting old. As we get to old to care, or need our money for other things like health care, the abundance of Classic Cars that use lots of fuel and cost lots of money will lose value for anything other than as museum pieces.

      There will be a huge supply and very little demand.

      Add in the pension crisis coming and the lack of income for many and maybe even a crisis in SS and government pensions and Classic Cars could be a dime a dozen sooner than anyone thinks.

      • polecat
        Apr 18, 2017 at 9:17 pm

        The’ll be plenty of hot rides for all the future Road Warriors to cruise around in, in the Big Waste, after we duke it out with the other nuclear biggies around the planet …. the pre-computer modulated vehicles will be all that function, as the new, and increasingly complex electronic auto systems fry from the EMPs detonated hither and yon ! Just make sure to keep an extra capacitor in a mini faraday cage ,,, for safe keeping , and not a word to Humongous!

        • TheDona
          Apr 19, 2017 at 1:13 pm

          Humungus was the Mad Max dude. Humongous was a Wrestler. :-)

      • alex in san jose
        Apr 19, 2017 at 4:54 pm

        economicminor – True on not being able to work on things now. I know more about motorcycles, and the modern bikes are as “computerized” as cars are now.

        Wrench’n’race, in my case street race and be annoying, and such things were possible as the amazing “Yamafordasaki”. We had no interest in Harleys, those were for old folks. You could buy a bike you could do plenty with for under a grand, and for a while the informal rule was “a dollar a cc”.

        But now, I have a bicycle, and it’s a tool. To get me to shopping, to errands, etc. The city I’m in is a traffic and parking nightmare and the younger kids love their bicycles because it’s easier to get around on one than with a car. And cars are just a tool. Sure plenty are colorful, oddly-shaped, etc to stand out and be “cool” but they don’t do more than check their fluids occasionally and even then, they’re on maintenance plans and the shop takes care of stuff like that. If a fluid’s low or something’s wrong, a little warning light comes on and they take it to the shop.

        If I’m in the market again for anything motorized, it’ll be as simple and functional as possible. Very possibly it’ll be electric. Maybe I should modify a “vape” to emit the smell of castor oil and have an MP3 of VRROOM-VRROOM! sounds.

    • John Doyle
      Apr 17, 2017 at 9:23 pm

      Tj, another thing in common. I was an aficionado of the Lancia marque. I lived in Turin for over 10 years through the 1970’s. so I got well into them. I owned a couple myself and brought them back to Australia when I returned in 1978. I don’t own them now.
      I agree wholeheartedly with the bubble criticism. I found for a friend a B24 spyder for 500,000 lira in 1971. Last auction one went for $us2,009,000,. Thats like house prices inflation.
      The cars are too valuable to take on the roads. In Italy if you do someone will coin it.
      So a crash is coming and those selling are being wise.

    • Louis
      Apr 18, 2017 at 5:21 am

      @TJ Martin

      Thanks for that; very insightful indeed. I also remember the late, great LJKS’s writings for Car magazine.

      And, of course, to you too @Wolf Richter

    • Crazy Horse
      Apr 18, 2017 at 5:42 pm

      Just to put things in perspective, when I was in my 20’s I owned a small restoration shop. I worked on the two Ferrari Daytonas in town— both sold for under 20k after I had painted and restored them. (although I did get to (public) road test them to find out if they would pull 175mph in top gear). I tried to get one of my clients to go haves with me on an ex-Prince Beria 500 Superamerica for $13,500. So bubbles have a long way to deflate.

    • Laurence Hunt
      Apr 19, 2017 at 1:45 am

      Wow. That was very illuminating. Thanks.

  6. Cousin Richard
    Apr 17, 2017 at 2:56 pm

    I think car collecting is an old persons game.

    • number1gi
      Apr 17, 2017 at 6:46 pm

      Well Cousin, who do you think is most likely to have the $$$ to play the “game”? Classic car collecting is not for the financially challenged.

      • azdude
        Apr 17, 2017 at 8:18 pm

        Rather it’s for the financially brainless. A true waste of money and a bonafide money loser.

        • number1gi
          Apr 17, 2017 at 8:52 pm

          Your comment could apply to virtually all collectibles, hobbies, entertainment venues, vacations, and gambling. Ever take a vacation, visit an amusement park, buy tickets to sporting events or music concerts, etc. azdude? If so, what do you have to show for it other than “the memories”.

          Like most of us, I’m sure there are many things you do that qualify as “A true waste of money and a bonafide money loser.”
          Hell, many college degrees meet your financially brainless, waste of money and bonafide money loser definition. I would imagine you have one of those IYI degrees.

        • azdude
          Apr 17, 2017 at 9:50 pm

          I agree. Collectible is a far characterization for all that junk.

          A 40 year old wreck with glossy paint is no more an “investment” than throwing good money after bad on housing “improvements”.

      • Justin Decodence
        Apr 17, 2017 at 8:51 pm

        Boomers believe the mantra ” he who dies with the most toys wins”.

        GenX and Millinials don’t care.

        • number1gi
          Apr 17, 2017 at 11:50 pm

          As Struther Martin once said: ” What we’ve got here is failure to communicate”

          Since we’re generalizing, I’ve read that millennials are all about the “experience”, e.g., dining out, travel, sporting events, etc.
          What’s your return on investment for the experience?
          “Rather it’s for the financially brainless. A true waste of money and a bonafide money loser.”

          Have a pet animal? Unless it provides you with food or income, what’s your ROI? “Rather it’s for the financially brainless. A true waste of money and a bonafide money loser.”

          Have a child? I think even you millennials can connect the dots at this point. Talk about a money pit.

      • TheDona
        Apr 19, 2017 at 1:31 pm

        Check out Wine collecting…That is a truly a suckers game for the wealthy. Documentary called Sour Grapes is worth a look. Paying a Million bucks for a fake bottle of wine. Geez!

        • Apr 19, 2017 at 2:04 pm

          But wait… How do you know it’s fake? Or would you rather NOT know? See, you cannot taste or drink the wine because doing so would destroy your investment and reduce it to zero at the first sip.

          So it’s better to keep the bottle hidden somewhere where no one can touch it, call it real, use it as collateral for a big-fat 100-year bank loan, and spend the money on something real, like lots of good $50-wines that you can actually drink and enjoy. After you die, let the bank and the kids worry about the fake bottle and the loan.

        • TheDona
          Apr 19, 2017 at 2:37 pm

          Wolf, regarding the Wine: one private seller got too greedy selling fake bottles and the whole scheme unraveled. The big collectors hired forensic investigators (cork experts, label, experts, glass experts) to discover which bottles in their collections were fake and then went back on the Auction houses and both public and private sellers. You can’t fight a pissed off Billionaire. Bill Koch had over 4 million in fakes and spent that much fighting.

          These people didn’t think twice drinking a $200,000.00 bottle of wine so I don’t feel sorry for them at all. Reminds me of Robin Williams saying, “Cocaine is God’s way of saying that you’re making too much money.”

        • Apr 19, 2017 at 6:20 pm

          I understand. I forgot to add /sarc

          :-]

    • R Davis
      Apr 20, 2017 at 12:10 pm

      You see, I was also wondering if old cars have not become a thing of the past. Look at the brilliant technology available to today’s young men & women, why collect rust buckets.

      My wish list ..
      Magna Steyr MILA .. the little orange / yellow job one seater .. & on the road.
      There are several other nice little vehicles I would like as toys.

      • R Davis
        Apr 20, 2017 at 12:51 pm

        Remember when you used to push your brother in the billy cart .. and you wished.
        Magna Steyr MILA is what you wished for.
        Magna Steyr MILA for the boy in you.

  7. Saylor
    Apr 17, 2017 at 3:19 pm

    I watch the boat sales (used) and am seeing price drops…someday….someday….

  8. Miatadon
    Apr 17, 2017 at 3:33 pm

    I wouldn’t say the prices are going down, at least not yet. Watch the website Bring a Trailer, and you will see that prices are on the rise for interesting classic cars.
    I am an MG enthusiast. This sale just took place at Sotheby’s:
    http://www.rmsothebys.com/am17/amelia-island/lots/1967-mg-mgb-roadster/1702145
    That sale may be an outlier, but it sure is unusually high price for a MGB.

  9. mean chicken
    Apr 17, 2017 at 4:03 pm

    I’m hoping at least this pump and dump resulted in l\an overall expansion of the pool of vehicles, not their ultimate destruction.

    I avoid the really old stuff due to lack of AC and generally poor brakes but have a special feeling for vehicles manufactured during the great depression..

    • Ethan in Northern VA
      Apr 17, 2017 at 9:24 pm

      Indeed. Pinball and arcade machines have gone through the same thing. To the point that a company has licensed some of the more sought after titles and is re-producing them. IIRC the last remake was $9000 per machine and 1000 people linted up immediately to buy. Other companies still make them and they produce a limited number of limited editions that cost some $3000 more then the normal edition and they sell.

      Older video games are the same way, I guess it’s the millenials classic cars since they’ve been bumped out of owning a house to store a classic car.

      I just saw a sound board for a 1990’s PC computer sell for over $3000, and Apple I computer boards (The originals made by Woz and Jobs) have fetched $900,000ish.

      Flipper nation, but I have to admit… the hunt can be fun!

  10. Don
    Apr 17, 2017 at 4:23 pm

    It’s useful to specialization in particular brand and know the differences rather than to think of classic cars as one big category.

  11. Mark
    Apr 17, 2017 at 4:32 pm

    Millennials don’t have the money to buy and just plain don’t care about classic cars. They also don’t drive.

    As the boomer generation dies off, we’ll see fewer and fewer buyers interested in classic cars. Don’t believe me? Check out the market for antique furniture sometime. Nobody wants that stuff anymore, prices continue to adjust accordingly.

    • number1gi
      Apr 17, 2017 at 8:09 pm

      You nailed it Mark! I think a similar phenomenon is occurring with golfing.

      This article and most comments pertain to classic car investing, which I believe doesn’t begin until you breach $50K and above. Those vehicles are usually climate controlled garage/trailer queens, i.e, virtually never exposed to the outside world or street driven. As one person commented, a piece of art.

      On the other hand, there are those hobbyist that enjoy working on, driving and showing a classic car or cars like myself. We aren’t looking to flip a vehicle for $$$, just enjoy them. I guarantee I get noticed more when driving my classic car than a late model luxury vehicle. Unless you’re gambling on the outcome, does the typical weekend golfer play the game for $$$?

      Also, when it comes time to part with the car, I can recoup most of my investment. Can you say that about golf and its associated costs when the time comes to give it up?

    • kf6vci
      Apr 18, 2017 at 1:57 pm

      Hear. hear!

      I recently got into Porsches. Late 1990s and early 2000. RHD, because they were much cheaper in England. Now selling them is a challenge…

  12. Brian
    Apr 17, 2017 at 4:47 pm

    I drive 1981 Rabbit pickup, I love it. But since they were only a 4 year car they are starting to rise in price. I see rusted junk for more than it should.

  13. George McDuffee
    Apr 17, 2017 at 7:22 pm

    Tulips — Beanie Babies — classic cars.

  14. milking institute
    Apr 17, 2017 at 7:24 pm

    Well,it’s all relative i guess,wish i had kept all the classic cars i used to own. my last was a 1963 Chrysler New Yorker,baby blue,push button tranny. bought it in 1995 for 1100.00 right around the same time i got my San Diego Duplex for 125 000.00. same Duplex today is 600 K and you would have to fork out 15 K for that Chrysler if you could find one. not sure what that says about asset bubbles,maybe it’s just the destruction of the fiat Dollar? of course we are overdue for major price correction for RE,collectibles,art etc only to be followed by another run up at witch point that 0ne and a half million dollar starter home will be accepted as normal. my neighbor just proudly admitted to have paid 35 grand for a little econo car “with moonroof!” LOL

    • Gershon
      Apr 17, 2017 at 8:36 pm

      With Keynesian “Zimbabwe Ben” Bernanke and Yellen hurtling us down the road to Weimar 2.0 with their deranged money-printing, true price discovery, when it finally arrives, is going to be cataclysmic for the Fed’s asset bubbles and Ponzi markets.

      • two beers
        Apr 17, 2017 at 10:25 pm

        On what freakin’ planet are Bernanke and Yellin Keynesian? They’re monetarists from the Holy School of Uncle Miltie Friedman.

        If you knew economic history, you would know that Friedman abhorred Keynesian policy: his mission was to destroy Keynesian hegemony — and he succeeded.

        Friedman was the Giver of Neo-Classical/Neo-Liberal Monetarism, which has been the prevailing state economic philosophy for the last nearly forty years, regardless of the which political party controls Congress or the White House.

        So, what you are doing is ascribing the failures of forty years of neo-liberalism (i.e. Milton Friedman and his ideological progeny) to a different and very marginalized economic philosophy.

        I stand in awe of your epic historical inversion.

    • Dan Romig
      Apr 18, 2017 at 7:32 am

      My brother in-law’s ’06 Audi A6 Quattro recently bit the dust, and he shopped around looking at new cars. Same conclusion: “35 grand for a little econo car?”

      Nope, he found a very clean ’09 Mercedes S550 4MATIC for $20,500. Damn nice car, and all wheel drive makes sense in Minnesota.

      This also ties into Wolf’s reporting on new car sales declining. A new Merc S550 4MATIC lists at $100,525. You can do a hell of a lot with the 80k he didn’t spend.

      • Mike G
        Apr 18, 2017 at 12:05 pm

        Old German cars are inexpensive for a reason. He’ll spend a ton on repairs and maintenance. The purchase price is only a down payment, it’s not the running-costs equivalent of a $20k Toyota.

      • RDE
        Apr 18, 2017 at 5:50 pm

        Dan,
        Recently bought a ’91 W140E chassis 4matic (the last of the real quality MB’s) with only 100k on it for only $2500. Better car than the 09 and will cost a fraction as much per mile for the next 100k.

        I’ve put 500k on old Mercedes, none of which I paid more than $3,000 for—.

        • azdude
          Apr 18, 2017 at 9:12 pm

          And then proceed to put $20k into a poorly designed depreciating asset.

          Eurotrash is known as Eurotrash for good reason.

        • RDE
          Apr 19, 2017 at 9:17 am

          Not exactly true AZdude.
          Old Mercedes were the cheapest cars I’ve ever owned. Less than $3,000 in repairs for 500,000 miles. Most expensive– Ford. Depreciating asset? After all those miles I sold them for more than the original cost.

          My point is that quality is cheap. Not that you can buy it anywhere today, regardless of which continent it originates from.

    • Robert
      Apr 18, 2017 at 9:24 am

      “my last was a baby blue,push button tranny.” [can we still call them that?]

  15. Gershon
    Apr 17, 2017 at 8:33 pm

    Lots of other bubbleicious asset classes are about to head south.

    http://www.zerohedge.com/news/2017-04-17/houston-commercial-rents-plunge-vacancies-hit-22-year-high

  16. mdr1@carolina.rr.com
    Apr 17, 2017 at 8:34 pm

    Inflation in everything you need. Deflation in everything you want.
    Kyle Bass.

  17. OldFarmer
    Apr 17, 2017 at 8:36 pm

    Back in the day I always drove low-end classic cars (36 Chevy Coupe, 51 Studebaker convertible, ’48 Diamond-T pickup) just because I appreciated them as works of art. They were easy to work on, too. As several commentators noted, by now even the bottom end of the ‘barely-classic’ car market has become absurdly overpriced, so I’ve given up my classics for a ’98 CRV. I’ve shifted my collecting over to classic tractors. Some have beautiful art deco lines, and were designed by great designers like Raymond Loewy, who also designed Studebakers. Tractors are fascinating mechanically, and easy to work on, and still as useful on the farm as when they were new. The prices are very low: for $1500 you can pick up a ’59 Ferguson TO-35 with straight tin and good mechanics. Give it ten coats of lacquer paint and some pin-striping, and plow your garden in style. (A pleasure–not an investment.)

  18. André Cassis
    Apr 17, 2017 at 8:40 pm

    Nostalgia never goes out of style. People remember times of their lives through the cars they drive. Classic car values will continue going through the roof. You know why? Because people today no longer buy cars. They lease and finance them….and they don’t take care of them. They are disposables. What that will do with Classic cars is simple. They will be out of reach for mere mortals. Only the wealthy will be able to indulge that luxury. If you can afford it buy as many Classic cars as you can afford.

  19. Derashi
    Apr 17, 2017 at 10:23 pm

    Classic cars. Never was very good at physics at school but I did learn that what goes up must come down. Of course if you did most of your coĺlecting in the 1960s and 70s, like Liberace you can still cry all the way to the bank.

  20. opalchip
    Apr 17, 2017 at 11:00 pm

    If these aging boomers would stop trying to collect cars like Jay Leno and Jerry Seinfeld, and instead try emulating their senses of humor… they’d get much, much more attention, be happier, and the whole country would be more fun.

  21. Kyle Davis
    Apr 17, 2017 at 11:26 pm

    How many boomers still have a sense of humor?

    Also, posit there are actually 3 main classes of vehicles here:

    1. Trailer queen/works of art/investment things. This is really what the article is referring to.

    2. Collectible/classic/driveable dailies or restore, or just owned by average joes who may not have access to cover charge for the frilly auctions where you see (#1.)

    3. Any new/modern car.

    Another poster mentioned that of class #3, it doesn’t matter as much since the name of the game is lease and try and avoid depreciation hit while being on the hook for things that wouldn’t apply if you were leasing a house, etc. (taxes, repairs, etc.)

    It’s a given. The market is going to crash soon. Worse case scenario, at least you can still use a car for transportation.

  22. Autospec
    Apr 17, 2017 at 11:41 pm

    Certain makes and models certainly have peaked, however a lot of North American 50’s-70’s classic and muscle cars still are relatively attainable. I look at a $30000 old convertible in nice shape and say lets compare this to buying a brand new VW Jetta. The convertible will at least hold its value indefinitely. The Jetta not so much

    • andy
      Apr 18, 2017 at 8:56 pm

      Very true if one saved $500 for emergency transmission repair.

  23. sinbad
    Apr 18, 2017 at 7:00 am

    I tend to look at the less expensive classics, and I have noticed a lot more coming on the market.
    Money’s too tight to mention.

  24. r cohn
    Apr 18, 2017 at 10:14 am

    The intricate and gorgeous painting,”Anna’s light” sold for a mere 105.7 m
    Based on this price ,all of these cars appear to be underpriced.
    http://maxestenger.blogspot.com/2014/02/shocker-newman-painting-quietly-sold.html

  25. Den
    Apr 18, 2017 at 11:13 am

    I think it all depends on how much you want to make by buying a classic car as an investment. If you want to retire to south of France you may have problem. If you do what I do, find good priced car,put little money into it to get running and driveable,keep it for a while,enjoy it and then sell it and be happy with making 1000-3000 dollars over what you have in it your good.

  26. russell1200
    Apr 18, 2017 at 11:27 am

    So I guess I should hurry up and sell my ’80 Chevy Citation while I can still get something for it!

  27. Mary
    Apr 18, 2017 at 12:27 pm

    What is the difference between an “asset class” whose value has meaning for the economy as a whole, and an object that’s essentially a niche collectible? Granted I know nothing about classic cars, but I figured they are a hobby for wealthy men. Changes in value might just be a matter of changes in taste and fashion. A celebrity like Jerry Seinfield collected cars, so that becomes a fad. He sells his collection, the popularity of classic cars diminishes.

    My experiences with the art market have taught me that auction houses, antique dealers, etc. want you to believe that all sorts of collectibles are good investments and will accrue value in a predictable way. It’s not true. Remember the Franklin Mint?

  28. CaptainDave
    Apr 18, 2017 at 1:32 pm

    It might be nice to have a classic car with a full tank of gas ready to go after a Carrington event (EMP) and nothing modern runs.

  29. MandoMadMan
    Apr 20, 2017 at 3:57 pm

    My best guess would be that as the owners – the ones that have the memories connected directly to their classic cars – die off and the cars are sold off it’s not likely that younger purchasers will be as willing to pay top dollar for something from an era they lack a direct emotional attachment to.

    Everything goes up and down.

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