Collector Car Market – The Beginning of The End?

[squirejo]

It is different every time. At least the exact trigger or collimation of events. The result is always the same.

With house prices, a national obsession, politicians & central bankers care because it can rip the heart out of the economy. So they yank the levers and introduce new policies to try to smooth the dip. At the moment it looks like they need to ease back a tiny bit... But it is a difficult trick.

Luxury asset prices tho, will not have any policy intervention.

I'm waiting for the daily mail stories about middle class icons buying a classic porsche with retirement funds to "see them right" then realising it needs £50k of bodywork, engine rebuild & refit (cue a few sobs about rip off "specialist") followed by the <gasp> horror that the value has stagnated and not increased by 15+% per annum.

Already out there. Several weekend broadsheets have run articles in Money sections about classic cars in pensions.
Here's one from end-2012

http://www.telegraph.co.uk/finance/pers ... tment.html

[squirejo]

I think the last couple of posters are getting close to the mark. This is an under-regulated and under-taxed activity. It didn't matter when it was about pocket money, but that's no longer the case.

and there's still plenty of money in wine.

I can always drink / drive it. Just don't drink and drive.

[roger_hudson]

I am sorry but I 100% disagree. If there is any sort of correction it will be in poor cars that people paid too much for. Quality cars are a not going to plummet at all.

There are lots of buyers in the market and even more waiting in the wings for the market to slip back a little (maybe 10% would motivated them).

Why will prices fall off the cliff John?

Also when you say too many RS's are you talking 73 cars?

If you plot the cost(?) selling prices of RSs or Ss you see a dip in the late 1970s ,standard depreciation, and then climbs and dips (market crashes?) but they always go higher , each peak higher than the last. Whether this follows just the fall in the value of money is an interesting question but the real answer is 'they don't make them like that any more'.
If there is a drop soon they will climb again, just hope you're alive to see it.

[roger_hudson]

How about some discussion about the cost of keeping your asset (a rare car) in condition on an annual basis, for me the cost of a 'replacement as-is' insurance premiums have become back-breaking, on top of secure garaging. Fuel costs at sub-20mpg are irrelevant.

[sladey]

Drive the fooka

[MonkeyChap]

Fooka? Never heard of that model. Is it one of those new fangled electric cars ?

[964RS]

You need the sports version though, the Mutha Fooka

[Darren65]

[PSut]

Guys, would I be right in thinking the % uplift on 911's has far outperformed other classics such as Alfa Romeos, BMWs, MG's and Triumphs? Some of the other marques are looking good value now in relative terms.

[MonkeyChap]

I don't think it's just Porsche - Astons and Dancing Donkeys have gone bezerk too.

On the other hand, my 65 Spitfire (yes, I seem to be drawn to cars with "unusual" handling) is worth about 50% more than it was in 1992 when I bought it. A pre-73 911 could be had for peanuts in those days, and I nearly bought a good 912 instead of the spitfire for the same money. The Spit is now worth 10% the value of a 912.

[100702mark]

For me the most worrying trend is classic car funds. As a general rule if you try to put an illiquid asset (car,wine,art,property etc)in a fund of Some sort and offer daily, weekly, monthly liquidity you have a problem. Funds attract investors who don't have a passion for the cars or who use them. Consequently you have a fund manager sat on a pile of cash with a group of investors pushing him to get in the market quickly rather than buy sensibly. This pressure results in them panic buying, questionable cars at inflated prices. When it unravels the man in the street who bought through a fund suffers the biggest loss as everyone in the fund heads for the exit forcing liquidation of the assets whereas the direct owner can ride the cycle if they choose but sadly are affected by the acts of the funds as stock is dumped on the market. We didn't really have funds the last time around so it will be really interesting to see what the impact might be.