FAQ Episode II
Hi Friends!
A little bit of a slow week in the US market, so we’re going to reach into the mail bag and address some frequently asked questions that we have received over the last couple of months.
I first want to say however, how much I enjoy connecting with you guys. I’m very fortunate to have some really passionate, articulate and plugged in readers and from my side of the screen, that’s a real privilege. Thanks for following along.
1. Why are some prices still rising even when parts of the market feel soft?
Ultimately, the collector car market is more than one market. We’ve got different time periods and segments, different eras, generations of buyers, etc which all paint a larger picture of what the market actually looks like. Traditionally however, it’s really been two different marketplaces. The top end of the market and everybody else. (with the exception of the early 90s and like 2023-2025 where both kind of left the playing field and the middle sliver was sort of running things), usually these two marketplaces operate in a seesaw type of manner. When the economy is good, the lower 8/10 of the market is active. This consists of people that are seeing upward mobility, successfully acquiring discretionary income and doing things like buying their dream cars and that type of thing. This market tends to provide the most for the most overall and is usually pretty good for everybody. The other side is when the economy isn’t so good. This allows people with significant safety nets to go out and acquire lower end assets at bargain prices, but on the other side, it also makes the truly top end, creme de La crème offerings shoot up in value. We saw this in a major way from 2008 through 2014 or so and it looks like we’re at the beginning of a similar situation here. For the overwhelming majority of the marketplace (the real bread and butter of the hobby if you will), the market is pretty soft. On the other side, we’re seeing insane prices on new segments of vehicles and players in the market making a lot of noise. This is just a symptom of a market focused towards the very top. Fortunately, these things are definitely directly related to each other and they tend to go in circles and this is how people make money doing this stuff. They understand which market they’re in, who’s buying what and then they buy low and sell high. For a lot of people, this market feels very challenging, but there’s also a tremendous amount of opportunity out there right now too. More so than ever, it pays to understand and educate yourself on what’s happening and how you can take advantage of it.
2. What is really happening with the muscle car market?
A couple of weeks ago we sort of loosely debunked the k-shaped market that a lot of major media has been complaining about pretty relentlessly lately. We illustrated that this k-shaped concept is actually more of a c-shaped concept and I don’t think this is present anywhere more so than the muscle car market. When you look at things like mid-century Shelbys or cars that are at that level that are proven, documented thoroughly and have all the right stuff done to them at meticulous levels, the sky is high right now. This said, the market is currently being flooded with really questionable cars that were put together quickly (and in a lot of circumstances carelessly) that are decorated from top to bottom with very era specific customizations done to really certain tastes and those cars have a tough time. None of this is particularly new. We’ve seen this with the Americana market and even more so with hot rods. While neon colored, tweed interior monstrosities with gigantic chrome dubs may have been very desirable and incredibly expensive to assemble for a long time, when people moved away from them, the value moved away too. Meanwhile, steel bodied hot rods that are tastefully constructed with rare parts, styled traditionally continue to hold value. The muscle car market is operating in exactly the same capacity. This said however, there’s a silver lining with muscle cars that has not existed with any of the aforementioned segments. Video games, movies, music videos, online media, etc all continue to predominantly feature classic American muscle. This means that there is an entirely new generation that has grown up lusting after these cars and they are now entering the marketplace. I probably see a dozen or more comments on social media daily remarking how excited people are that these cars are coming down in value and that they can finally be able to afford one of their own. These are people that will start at the bottom and move their way up just like every other collector does and this means that there is long-term stability in American muscle which generally hasn’t existed in other places before. For certain collectors this is not particularly great news, but for others it’s incredibly exciting. So often, you hear people at car shows and in classic automotive media, etc remark about how they want the love for the cars that they love to continue on. With American muscle, there is a real opportunity for that to become a thing and I think it’s already happening right before our eyes.
3. Why are there so many super low mileage Fox Body Cobras on the market right now?
It’s interesting, I recently kind of noticed this as well. I’ve got a client that’s got a handful of these that all seemed to randomly fall out of the sky at the same time. Impeccably maintained, thoroughly preserved, showroom fresh examples with what essentially amounts to delivery miles. I’ll be honest, the timing on this is kind of surprising me as well, but this is a thing that we’ve seen before. For certain cross section of enthusiasts, for some reason the drive is not the appeal. It’s buying something cool and then putting it under plastic and never doing anything but polishing it. Sometimes for decades at a time. There’s certainly exotic car people that do this (and for them I think it kind of makes sense, because these are not really ever designed to be daily transportation or anything even remotely close to that), but the real culprits of this always seem to be American car people. Think back 7 or 8 years ago, the market seemed to all of a sudden be flooded with hyper low mileage Corvette ZR1s. Of course, there’s no shortage of 200-mile Ford GTs either. At this point, you can’t really have a collector car auction without one. I’m not really sure what’s driving these particular cars out of hibernation right now. From my perspective, it seems like this is something that should have happened around the same time that the ZR1s were popping up (which by the way, those cars remain an absolutely ridiculous value. So, so much car for the money). Either way, here we are and I’m not complaining about it. I think stuff like this is cool, I think it provides critical reference material for restorations and I’m glad stuff like this exists.
4. What actually makes a car Blue Chip today?
I don’t think the rules on this have changed a whole lot. Needs to be the right year, make, model and if it’s got low production or special feature type components then you’re really on to something. It’s also got to be the right car too. Good mileage, no stories, impeccable documentation, etc. Blue Chip cars are desirable cars first, good examples second and well gone through and well documented third. Of course, there’s outliers like pop culture and ownership chain that can definitely play into this as well, but overall this remains the basic blueprint.
5. Are we early or late in the current collector car cycle?
I think right now we’re pretty clearly in both. The mid-century stuff is definitely late cycle, but as retro and modern classic cars start to shoot through the roof, I think it’s pretty clear that we’re at the very beginning of that. Again, this whole market operates on simultaneous cycles. There’s always something going down at the same time that something is going up. This is how people make money in this space. They learn to recognize and predict these patterns and then they take advantage of it as soon as they see it. This is the beauty of this marketplace. There’s always something to be excited about somewhere.
Once again, I want to thank you for reading and contributing your opinions and ideas. This newsletter wouldn’t be what it is now if it wasn’t for your involvement. This newsletter and this community is always a work in progress and I’m always playing around with things behind the scenes that I think could enhance the overall experience that you have here as a result. Lots of interesting things coming over the next 12 months or so, so stay tuned!
Thanks for following along. I certainly appreciate you!
That’s it for this week……
Darin Roberge