The future of classic cars?

[Haseeb]

Today I come to you guys with a pretty deep question that's been on my mind for many weeks: what do you guys think will become of the classic car market from here on out?

I am a bit of an oddity among millenials, I'm 20 years old but I have a real strong interest in cars from the 50s, 60s, and 70s, both for driving and possibly investing in them, and I have no desire at all for self driving cars to come about. I know that the baby boomers who are in their 60s and 70s at this point are beginning to retire, and they are the ones that created the classic car market in the first place. What will become of the market for 50s cars like the Buick Special, Ford F100, and Studebaker Bullet Nose? I think it would be truly sad to see the market and appreciation/love for those cars go away whenever the older generations begin to exit the market, but of course I have no idea of knowing the future. Let me know what thoughts, predictions, or hopes you guys have in the comments!

 

[Stevehose]

You are a renaissance man, hats off to you, there aren't enough of your age group to continue the hobby as it is now, i predict older cars, other than ferraris, especially pre war will start to head to zero, it's all about what you grew up with. Right now 60's to 80's are safe, older models are doomed imho.

 

[Philippe db]

Hi Haseeb,

Good question but impossible to answer. Population on our planet keeps rising, and more and more people come in to money. These old cars aren't produced anymore and have to be shared between more people with interest in them. This explains the current price rise. As far as the future is concerned due to the continuous growth of the population and the increase of wealth a lower percentage interested in these cars will still add up to the same demand in real numbers.

I'm also active in an other hobby, German WW II militaria and here the same question pops up over and over again. What will happen to the hobby if the generation that grew up with "Airfix" and movies like "The eagle has landed", "A bridge to far" or "Steiner cross of Iron".....isn't around anymore, who will be still interested in this stuff. In this hobby we see the same as we see in the car market.

Quality and originality will always be in demand. The market and collectors get more mature and knowledgeable and prices for top pieces will keep on rising. A pre-war Mercedes 500K, a 1950 Jag XK or a Porsche 356 will hold on to their value 20 year from now just as well as they do today. The crap will be filtered out making it more and more difficult for the remaining collectors to find/acquire what they are looking for, as such supporting values.

Just my 2ct.

 

[deQuincey]

there is another issue too, pollution regulations and then access to cities,...

 

[Belgiumbarry]

on the other hand our modern cars will never be "oldtimers" as we know now….. they are way to complicated to maintain and keep driven …. almost every part has a sensor now . A nightmare to find "faults" and expensive to repair.

 

[Philippe db]

on the other hand our modern cars will never be "oldtimers" as we know now….. they are way to complicated to maintain and keep driven …. almost every part has a sensor now . A nightmare to find "faults" and expensive to repair.

True Barry but there is another reason why they will never become collector cars. What we collect dates from an era when the world was small as were production numbers. 20.000 Cs's from '68 till '75. Nowadays BMW builds more 6 series BMW's in a few months. Porsche is also a nice example. Total 911 production from 1973 till 1989 = 196.397 in 26years. Porsche 911 (996) production from 1997 till 2005 =175.262 in 8 years!! . You can't but wonder what they are pumping out now.

 

[adawil2002]

My family has been collecting cars since the early 1950s. They used to daily drive '32, '33, '34, '41 & 48 Packards, a 1929 Lincoln Judkins Coupe, '39 Lincoln Zephyr in the '50s to the '70s. My mom drove a '34 Packard Super 8 Convertible Coupe in high school. I learned to drive in a 1933 Packard Twelve Coupe Roadster which I sold last year. Still own the 1914 KisselKar 4-40 Touring my grandfather bought in 1959. One of my grandfather's previous Packards, the 1932 Twin Six Dietrich Victoria won Best in Class Open Packards at Pebble Beach 2017 & was in the running for Best of Show, now owned by 'Chip' Connor of Reno NV.

The vintage and classic car market has changed considerably over the years, the cars of my grandfather's generation are still sought after yet the market for for them has crested and softened a bit as cars are inherited and or sold off to museums or private collections.

People tend to covet the cars of their youth and teenage years which is what drives the market. As those collectors pass away, the market in that car era softens.

There will always be a market for low production cars no matter when they were built. Look at the BMW Z8 market. Cars sold for around $100K and were sold as low as $85K as 'used cars' and have easily doubled or tripled, have seen the ask as high as $400K for very low mileage examples. Coulda shoulda bought one in 2005 for $90K. I'm sure we all have stories of missed opportunities. I should have traded my '33 Packard Twelve for the 1962 Ferrari 250 Series I PF Cabriolet in 2003 they were both worth $200K, the Ferrari is now close to $2 million.

I follow the BMW market pretty closely from 1934-1991.

 

[Haseeb]

My family has been collecting cars since the early 1950s. They used to daily drive '32, '33, '34, '41 & 48 Packards, a 1929 Lincoln Judkins Coupe, '39 Lincoln Zephyr in the '50s to the '70s. My mom drove a '34 Packard Super 8 Convertible Coupe in high school. I learned to drive in a 1933 Packard Twelve Coupe Roadster which I sold last year. Still own the 1914 KisselKar 4-40 Touring my grandfather bought in 1959. One of my grandfather's previous Packards, the 1932 Twin Six Dietrich Victoria won Best in Class Open Packards at Pebble Beach 2017 & was in the running for Best of Show, now owned by 'Chip' Connor of Reno NV.

The vintage and classic car market has changed considerably over the years, the cars of my grandfather's generation are still sought after yet the market for for them has crested and softened a bit as cars are inherited and or sold off to museums or private collections.

People tend to covet the cars of their youth and teenage years which is what drives the market. As those collectors pass away, the market in that car era softens.

There will always be a market for low production cars no matter when they were built. Look at the BMW Z8 market. Cars sold for around $100K and were sold as low as $85K as 'used cars' and have easily doubled or tripled, have seen the ask as high as $400K for very low mileage examples. Coulda shoulda bought one in 2005 for $90K. I'm sure we all have stories of missed opportunities. I should have traded my '33 Packard Twelve for the 1962 Ferrari 250 Series I PF Cabriolet in 2003 they were both worth $200K, the Ferrari is now close to $2 million.

I follow the BMW market pretty closely from 1934-1991.

View attachment 48243 View attachment 48244 View attachment 48247 View attachment 48248 View attachment 48249 View attachment 48250 View attachment 48251

The collection you and your family have is absolutely stunning! I am in awe :eek:! What you are saying makes a lot of sense to me, I think I might start looking into older cars that are a bit more unique and lower-produced (like the Jaguar 420) which still really have that older vibe for me but will turn heads and probably be desired by my age groups in the future

 

[Haseeb]

You are a renaissance man, hats off to you, there aren't enough of your age group to continue the hobby as it is now, i predict older cars, other than ferraris, especially pre war will start to head to zero, it's all about what you grew up with. Right now 60's to 80's are safe, older models are doomed imho.

Thank you Steve! I have a few like minded friends who helped me get into this, but you are right, there are unfortunately not too many of us...I think the 60s and 70s stuff (Buick Riviera anyone?) is really great and it is pretty safe to get into that like you said, so I will continue to look into those more and hopefully they remain valuable and popular for a while. (breaks my heart to stay away from the Studebaker Bullet Nose but it would be the wisest choice for now). I am quite partial to getting a 1985 Delorean DMC-12 however

 

[Ohmess]

Haseeb -- I would encourage you to think more broadly about this topic. For example, your comment that baby boomers created the classic car market, combined with your interest in cars baby boomers would collect because they remember them from their teenage years, could lead you into cars that are about to drop in value as baby boomers pass away. Lots of the cars boomers like were pretty crappy cars.

Better to think about this from a wider perspective and to identify the factors that enable long term value. Low production rates (as Andrew mentioned); cars that have racing provenance (like our beloved e9s); cars by particular good designers; extremely well engineered cars, etc. Rather than picking individual cars, you might consider picking a particular type of car.

And you need to think about the supporting infrastructure for your collection. You can sustain a group of similar cars much more readily than an eclectic group of cars. The more diverse your collection, the larger and more complex your support system becomes. A friend of mine -- the engine guy for a collector with a $20 million car collection -- recommends that you identify your support system first. And if you are serious, he recommends that you hire your own group of mechanics to support your collection.

 

[teahead]

The price of restoration is through the roof, so eventually, cars worth less than $30k fully restored, will not get restored.

Millenials just do not have the purchasing power that Gen-X/Baby boomers have, and will never have, due to wage stagnation and housing costs going up constantly.

Millenials grew up w/Honda Civics and Accords and Golfs. Basically throw-away cars.

In other words, in 20 years, it'll be dead.

 

[mulberryworks]

The price of restoration is through the roof, so eventually, cars worth less than $30k fully restored, will not get restored.

Millenials just do not have the purchasing power that Gen-X/Baby boomers have, and will never have, due to wage stagnation and housing costs going up constantly.

Millenials grew up w/Honda Civics and Accords and Golfs. Basically throw-away cars.

In other words, in 20 years, it'll be dead.

Well, VW beetles used to be throw away cars too, and look at what people are paying for them. I agree the whole field will change as the population ages, but good examples of interesting cars will still be wanted. Some version of the market will persist. Will it be robust and growing? or declining is size and value? Hard to say.
The lack of fuel to run the engines may put a serious dent in the usability (and value) of ICE powered cars in coming decades much like the declining production of film from Ilford, Fuji and Kodak is hampering the current resurgence of film cameras.

Ian

 

[Haseeb]

Well, VW beetles used to be throw away cars too, and look at what people are paying for them. I agree the whole field will change as the population ages, but good examples of interesting cars will still be wanted. Some version of the market will persist. Will it be robust and growing? or declining is size and value? Hard to say.
The lack of fuel to run the engines may put a serious dent in the usability (and value) of ICE powered cars in coming decades much like the declining production of film from Ilford, Fuji and Kodak is hampering the current resurgence of film cameras.

Ian

There's a shop in California that has begun to restore classic cars to electric power instead of combustion! I think they are called EV West or something like that

 

[Haseeb]

Haseeb -- I would encourage you to think more broadly about this topic. For example, your comment that baby boomers created the classic car market, combined with your interest in cars baby boomers would collect because they remember them from their teenage years, could lead you into cars that are about to drop in value as baby boomers pass away. Lots of the cars boomers like were pretty crappy cars.

Better to think about this from a wider perspective and to identify the factors that enable long term value. Low production rates (as Andrew mentioned); cars that have racing provenance (like our beloved e9s); cars by particular good designers; extremely well engineered cars, etc. Rather than picking individual cars, you might consider picking a particular type of car.

And you need to think about the supporting infrastructure for your collection. You can sustain a group of similar cars much more readily than an eclectic group of cars. The more diverse your collection, the larger and more complex your support system becomes. A friend of mine -- the engine guy for a collector with a $20 million car collection -- recommends that you identify your support system first. And if you are serious, he recommends that you hire your own group of mechanics to support your collection.

That is very insightful and something I will definitely need to keep in mind!

 

[Ohmess]

Well, VW beetles used to be throw away cars too, and look at what people are paying for them. I agree the whole field will change as the population ages, but good examples of interesting cars will still be wanted. Some version of the market will persist. Will it be robust and growing? or declining is size and value? Hard to say.
The lack of fuel to run the engines may put a serious dent in the usability (and value) of ICE powered cars in coming decades much like the declining production of film from Ilford, Fuji and Kodak is hampering the current resurgence of film cameras.

Ian

As long as fuels derived from oil power our military vehicles, we will maintain an infrastructure in the U.S. to produce gasoline.

 

[Markos]

As long as fuels derived from oil power our military vehicles, we will maintain an infrastructure in the U.S. to produce gasoline.

Good point.

 

[Haseeb]

https://www.hagerty.com/articles-vi...-are-ready-to-carry-the-collectible-car-torch

This article made me smile from ear to ear, maybe there is still hope guys!

 

[Belgiumbarry]

i hope Haseeb, but i doubt….. sure , young people don't have the money anymore to buy cars….. and are not that more interested… sure not wrenching on it for days to drive it 1 …. we knew those cars as dailys , used to the pro's&con's , now they all have +200 HP grocery getters ….. aircon, automatic this &that… oil change every year and that's all what they know to have it done….at the garage.
I think with each generation there is a lost in interest...just as i , myself, like to see a pre-war car but sure won't buy it …. it doesn't drive well...
and ofcourse , there will be always exceptions…. some old school youngsters

IF i may give you a ( Europe) tip.... convertible AND manual.....

 

[Eiremon]

What do you mean by "possibly investing"? Are you referring to short-term restorations and sales or long-term speculative holds?

Be careful with the idea of investing in any classic car. Most cars with the exception of a few rare models are poor investments which underperform the stock market by a large margin. Even the Z8 mentioned above has underperformed the S&P 500 since it was introduced in 2000 when you factor in insurance, tax and upkeep. If you bought one in early 2014 right as the classic car market took off you would be ahead - good luck timing the market. Even the example above - buying for $85k in 2005 - would net a lower return than the S&P.

Don't be fooled by the recent run up in classic car prices. The winners are those who purchased in the 0-5 years just before the boom and are getting to break even or make some decent money. Some have done well but it was mostly luck - no one knew the market was going to do what it did and no one knows where it will go from here. For those entering the market today I am skeptical that you will see anything close to the same returns.

Your focus at 20 years of age (I sound like a parent ) should be on saving as much as you can for as long as you can. $100k gaining 8% over 30 years will net you $1m. The $10k spend on an E9 in 1971 would be worth $283k today if invested in the S&P!

Ok - so you don't want to wait 30 years for gratification - and you need to drive something. Makes sense and life is short so by all means satisfy the itch in the short term by purchasing low cost (harder to find today), very well maintained cars from trustworthy enthusiasts who have poured their hearts, souls and wallets into the cars they love. Take the rest of the money and invest it long term in other areas.

Now... with that out of the way - as far as which classics will be desirable in the future. I was born in 78 and have no memories of the 2002 or E9 cars even though my dad drove a 2002 at some point. I believe that simplicity is fundamentally desirable, whether it's a car, painting, architecture, etc. There will always be a market for these cars - especially if the brands behind them (BMW, Porsche, etc.) remain strong.

Fast forward 50 years to 2068 - the Corvette below is now 100 years old and all of the folks who grew up with them are gone. Do you think your future grandkids would like to cruise around town in it? Without a doubt! (just wait 30 years before you buy it )

https://bringatrailer.com/listing/1966-chevrolet-corvette-17/

 

[teahead]

I think modern technology will save these classic cars.

I.e. battery-power conversions. Clean, quiet, FAST!

https://www.greencarreports.com/news/1082166_classic-bmw-coupe-becomes-800-horsepower-electric-car