New Generation Takes Over Monterey Classic Car Sales Stagnant | Real Time Headlines

A version of this article first appeared in CNBC’s Inside Wealth newsletter with Robert Frank, a weekly guide for high-net-worth investors and consumers. Sign up To receive future editions delivered directly to your inbox.

Auction sales during Monterey Car Week were down 3 percent from last year as the shift from used cars to new cars left classic cars from the 1950s and 1960s piling up unsold.

Total sales at Monterey’s five car auctioneers – RM Sotheby’s, Broad Arrow, Gooding & Company, Mecum and Bonhams – fell this year from $403 million in 2023, according to classic car insurance company Hagerty. to $391.6 million. Last year was down 14% from the peak in 2022.

Hagerty said of the 1,143 cars for sale, only 821 were sold, a 72% sell-through rate. The average sales price was $476,965, slightly lower than last year’s average sales price of $477,866.

Wealthy collectors still have plenty of money to spend and feel confident given the recent stock market rally, but the types of cars they want are changing, experts say. There are too many similar cars at too many auctions to generate strong prices and sales.

“It’s saturated now,” said Simon Kidston, founder of Kidston and a key adviser to wealthy car collectors. “When I walk around auctions and see so many similar ‘products’ I ask myself if anyone has considered what they or their competitors have delivered and whether these cars are competing for the same buyers. Fact , many of the entries have been on display in dealer windows for months or years, and it always feels like a few sloppy seconds.

At the same time, the new generation of collectors driving the market (primarily Gen X and Millennials) prefer cars from the 1980s, 1990s and 2000s. Classic cars from the 1950s and 1960s that have powered the market for decades and are popular with baby boomers are now flooding the market without finding buyers.

According to Hagerty, Monterey’s sell-through rate (or the percentage of cars actually sold on the auction block) for pre-1981 cars priced at $1 million or more is only 52 percent. The 73% sell-through rate for cars less than 4 years old proves that young collectors now dominate.

Hagerty’s supercar index for sports cars from the 1980s to 2000s is up more than 60% from 2019, while the blue-chip index for Corvettes, Ferraris, Jaguars and other legendary classics from the 1950s and 1960s is down 3 %.

True, a few rare true masterpieces still command high prices. The top-ranked car this week was a 1960 Ferrari 250 GT SWB California Spider, which sold for $17 million at RM Sotheby’s. The runner-up was a 1938 Alfa Romeo 8C 2900B Lungo Spider. One of only five cars left in existence.

However, broader changes in classic cars, especially as many older collectors begin to sell or downsize their collections, may put pressure on classic car prices for many years.

“From an auction perspective, the market continues to catch its breath while we transition from popular models such as Enzo-era Ferraris, so-called complete classics, and race cars from the 1950s and 1960s, to the ascendant modern supercar category,” Ha said Getty CEO McKeel Hagerty. “The gap between old cars and new cars is accelerating.”

Some say high interest rates are also putting pressure on the classic car market. At the lower end of the market, many buyers have been taking advantage of financing to purchase cars and build their collections. At the high end of the market, rising interest rates have increased the opportunity cost of buying a classic car.

“People think, ‘If you had a great manager, I could make 5 percent or even 10 percent instead of that million-dollar car,'” Kidson said. “This, more than anything else, makes people think twice. Collector cars are part investment. The value of collector cars has increased over the past 40 years for no other reason than an investment perspective.