What an amazing year for car prices. Every time we think they can’t go any higher, they seem to do just that… ‘seem to’ being the operative words.
A variety of factors are contributing to this, so we need to look at where perceptions of classic car prices are formed. In the age of social media and bite-sized PR snippets it is very easy to gloss over the real detail, and this has been highlighted by our recent auction research.
The trend towards cars selling under estimate has been increasing since the Monterey ‘festival’ of classic car auctions in August. We’ve also noticed that some cars that appear to sell within estimate at auction are appearing in final results as unsold. All of which begs the question – are sellers’ expectations set too high, and if so why?
Maybe the reason is this. The classic car media generally has two go-to resources for market information – dealers and auction houses – and both have an interest in a strong market. If advertisers are also the paymasters of reporters and publishers, should we even expect a truly balanced market view in the media?
Always remember, the cars you see advertised are the ones that haven’t sold yet
To form an opinion on values, the average classic car enthusiast must rely on auction reports that generally focus on a handful of over-performers at any particular sale, and dealer advertisements. This is not so easy when many are priced way over the market (‘bandit pricing’ as one collector I know calls it), and a significant proportion or cars advertised have no price displayed.
The other popular but dangerous pricing resource seems to be ‘my mate saw one for sale’. Because, hey, isn’t everything that you see on the internet true? It’s the modern equivalent of pub talk.
Recently one of my colleagues had a conversation with a customer who had seen a ‘rare’ edition of an Aston Martin for sale. Enquiring on his behalf (it was listed as POA), we were eventually given a figure after the ‘seriousness’ of our interest had been assessed. In detail.
At three times the normal market price, our client declined to pursue the car and a few short weeks later the vehicle in question had been removed from the dealer website and delivered back to the owner unsold. Perhaps it will reappear on the market in spring – but at what price then?
A few days later our customer rang again: ‘Did you see that they sold that car? I should have bought it!’ In his mind the price of that car is now three times its actual market value – even though it didn’t sell.
With the classic car market the healthiest it has been in over a decade, buyers need to read between the lines and exercise due diligence. Always remember, the cars you see advertised are the ones that haven’t sold yet – is there a reason why?
Edward Legge is Director of Commercial Development at Classic and Sports Finance