Auction sales during Monterey Car Week have experienced a noticeable decline, falling 3% from the previous year. This drop can be attributed to a shift in preference from older classic cars to newer models, leading to a surplus of unsold classics from the 1950s and 1960s. Total sales at the five car auctioneers in Monterey, including RM Sotheby’s, Broad Arrow, Gooding & Company, Mecum, and Bonhams, dropped to $391.6 million this year from $403 million in 2023, according to Hagerty, a classic-car insurance company. This trend follows a 14% decline from the peak of 2022. Of the 1,143 cars up for sale, only 821 were sold, resulting in a 72% sell-through rate. The average sale price also saw a slight decrease from last year, dropping to $476,965 from $477,866.
Changing Preferences of Wealthy Collectors
Wealthy collectors, who still possess ample funds to spend, are now showing a preference for cars from the 1980s, 1990s, and 2000s. This shift is being predominantly driven by a new generation of collectors, mainly Gen Xers and millennials. The classic cars from the 1950s and 1960s, which were once highly sought after by baby boomers, are now struggling to find buyers in the market. The sell-through rate for pre-1981 cars priced at $1 million or more was a weak 52%, while cars less than 4 years old had a much stronger sell-through rate of 73%, indicating a change in buyer demographics.
Hagerty’s Supercar Index, which tracks sports cars from the 1980s through the 2000s, has seen a significant increase of over 60% since 2019. In contrast, the Blue Chip Index, which includes classic cars from the 1950s and 1960s such as Corvettes, Ferraris, and Jaguars, has experienced a decline of 3%. While rare masterpieces still command high prices, the overall market for older classic cars is likely to face downward pressure as older collectors begin to sell off or downsize their collections. The shift towards modern supercars is becoming more pronounced, with the market dynamics favoring newer models over vintage classics.
Some experts argue that high interest rates are also contributing to the pressure on the classic car market. Financing options have been a common way for buyers to enter the market and expand their collections. However, rising interest rates have increased the opportunity cost of investing in classic cars. Potential buyers are now weighing the returns they could earn by investing elsewhere, leading to a more cautious approach towards purchasing collector cars. The appeal of classic cars as investments is being challenged by the potential returns offered by other avenues, causing collectors to rethink their buying decisions.
The classic car auction market is undergoing a significant transformation driven by changing buyer preferences, particularly among younger collectors. The oversaturation of similar cars from the 1950s and 1960s has led to a decline in sales at auction events like Monterey Car Week. As the market continues to evolve, it is essential for sellers and collectors to adapt to the shifting trends and embrace the new era of modern supercars.
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