Editorial: Collector Car Market: The Sky Hasn't Fallen; Just a Few Prices

Chuck Goolsbee
by Chuck Goolsbee

In a recent news article, RF stated: “…here’s another story where the web pulls the rug from under auto industry types seeking to hide the truth. We’ve been saying it forever (in Internet terms): the collector car market has collapsed. Well, duh. But the mainstream media and specialist press has both been happy to perpetuate the myth perpetuated by the auction houses that their business has been defying gravity. See? Cars are selling for phenomenal prices! Meanwhile, Hagerty’s CARS THAT MATTER is telling readers to pay attention to the men behind the curtain.” In truth, the men behind the curtains are not the market. They are middlemen. They extract a percentage from every participant they can find to witness their activities; Buyer, Seller, hell, even the gawkers have to pay to watch the show. The auction houses are, in ecological terms, parasites on the very market they claim to serve. Like any parasite their success has a tendency to cause harm to their host. These guys are tarted up used cars salesmen. That, and the recent transformation of the car auction into a three ring circus, is what is killing the auction companies, and it has absolutely nothing to do with the collector cars being sold.

All these moves created an artificial market bubble where some people were proven to be fools, easily separated from their money. It successfully convinced them that a machine mass-produced by the hundreds of thousands could have rarity based on factory options. They achieved this by wining, dining, and blinding those fools with the bright lights of live TV coverage. In an era where celebrity is valued above wisdom, why not go for fame and throw a few hundred grand at that Mopar?

Smelling blood in the water, and seeing the resulting feeding frenzy themselves, more parasites attach themselves to the market. Builders and restorers taking less-valued stock from that mass-production pool of used cars and create a host of dubious offerings for the auction block. “Resto-mods.” “Tribute” cars. “Continuation” cars. As a bonus, many of them even turn this activity into TV shows, attaching themselves to the celebrity culture.

Finally even the manufacturers themselves got into the game. Selling the first cars off the lines at auctions. Selling off their own collections. The final insult to both the auction houses and to their own lack of vision: Building retro-cars and selling straight to the consumer.

This whole collection of players created a market-within-a-market, and it inflated too far, too fast to sustain itself. That is what has collapsed. In a decade we might call it “The Muscle Car Bubble” or maybe “The Baby Boom Bubble.” Like all economic downturns a few of the “innocent” were harmed in the collapse, but mostly the damage, deservedly so, has been contained within the bubble’s sphere of influence.

The collector car market is, and always will be, healthy. Collector cars are not beanie babies or Pokémon cards. Automobiles have aesthetic appeal and genuine practical use. They have intrinsic value, both as a utilitarian object, and as a stylistic example of what happens when engineers and designers create something. Sir William Lyons, the man behind Jaguar, once said, “The car is the closest thing we will ever create to something that is alive.”

There is palpable inspiration and creativity expressed in the form of the automobile. People who love cars will always want, buy, and sell them. Private sales make up the vast majority of all collector car transactions, and the Internet is transforming that market from a local to a global phenomena accessible by anyone, anywhere. Car auctions are also dying for the same reason swap meets, car clubs, and buff-books are. You can browse the whole planet’s supply of cars, parts, and automobilia from your laptop or cell phone. On your schedule, at minimal cost. Craigslist has far more reach and power than Craig Jackson. Google will find what you want better than Gooding.

The Collector Car Market hasn’t collapsed. It merely sheds excess now and then when parasitic traders come in and inflate a bubble such as we’ve seen recently. There are top tier collector cars and there are pedestrian collector cars. Duesenbergs and Delahayes will always have value, as will ‘Cudas and Camaros. Only when the latter types start trading at prices near the former you have a market as artificial as testicles hanging off a truck.

Smart people and smart money were never in the bubble anyway. The market survives. Smart auction houses will even survive the stupidity of some of their brethren. Those that haven’t fallen into the trap of celebrity culture glitz will continue to bring buyers and sellers together for as long as there are titles to trade along with the hardware. What we are seeing is the deserving death of a small portion of the market. Couldn’t have happened to a more deserving bunch.

Chuck Goolsbee
Chuck Goolsbee

Second Generation Car Guy living in the Sasquatch-filled wooded hills of the Pacific Northwest with an old E-type Jaguar and a lawnmower that run on gasoline. Everything else I drive runs on home-brew BioDiesel.

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  • Zombo Zombo on Sep 13, 2009

    Did anyone ever notice that many of the very same cars are being auctioned off on Barrett Jackson year after year ? These are not car collectors , but car investors - buying each others cars , keeping them one year , then putting them up for auction again to drive prices in the collector car market up . These are the very parasites the article mentions , more money than brains indeed !

  • BigOldChryslers BigOldChryslers on Sep 14, 2009

    @Martin Schwoerer: Some people "get it", like Mr.Goolsbee and I. Others don't. You just don't have the right attitude to appreciate the old car ownership experience. Most problems encountered en route are inconveniences, but if you're familiar with your car and carry some basic tools, you'll almost never actually get stranded on the side of the road. I haven't yet. @DweezilSFV: I think the last part of your comment was actually directed at me. It would be nice if my 'vert had some rare options than our other 66's don't, since my wife has capped the number of cars I'm allowed to buy. The lack of options was one reason the car was in my pricepoint at the time though, so I can't complain too much. Ironically, now that I have all the gremlins worked out of it, she's put more miles on the 'vert than I have this year. @Zombo: I've read that a lot of the guys that buy and sell cars at big auctions like BJ only deal in that market, so they're in their own little bubble. A few people make big money at BJ by tracking down and buying excellent rare cars through private sale then bringing them to BJ. On another angle to the prices that low-production muscle cars were going for til recently, some guy paid a whopping sum for a documented '71 Hemi Cuda convertible a few years ago. When interviewed, he was asked if he felt he overpaid for the car. He explained that that car was one of the benchmarks for all E-body (Cuda and Challenger) prices, and his garage already contained a number of Hemi and 440 6-pack E-bodies, which had instantly increased in value because of the new benchmark price. Interesting POV; I hope he sold a couple of them while the market of was hot.

  • 3-On-The-Tree Lou_BCsame here I grew up on 2-stroke dirt bikes had a 1985 Yamaha IT200 2-strokes then a 1977 Suzuki GT750 2-stroke 750 streetike fast forward to 2002 as a young flight school Lieutenant I bought a 2002 suzuki Hayabusa 1300 up in Huntsville Alabama. Still have that bike.
  • Milton Rented one for about a month. Very solid EV. Not as fun as my Polestar, but for a go to family car, solid. Practical EV ownership is only made possible with a home charger.
  • J Love mine, but the steering wheel blocks dashboard a bit, can't see turn signals nor headlights icons. They could use the upper corners of the screen for the turn signals. Mileage is much lower than shown too, disappointing
  • Aja8888 NO!
  • OrpheusSail I once did. My first four cars were American made, and through an odd set of circumstances surrounding a divorce, I wound up with a '95 Nissan Maxima which was fourteen years old and had about 150,000 miles on it.It was drove better, had an amazing engine, and was more reliable than any of my American cars. This included a new '95 GMC pickup that went through five alternators in under two years while the dealership insisted that there was no underlying electrical problem while they tried to run the clock on the warranty.That was the end of 'buy American'. I've bought from Honda and VW since, and I'll consider just about anything except American now.