9 September 2013

Hagerty Price Guide Index Preview: Book 22

The Hagerty Price Guide recently published values from Book 22 and some of the results are astounding. Those who took note of market activity over the summer, which was particularly apparent in Monterey and Pebble Beach in the middle of August, are probably aware that values are moving quickly. Just how quickly, however, might come as a surprise.

As has been the trend for the past several years, high-dollar market segments are exhibiting vigorous improvement. This is most acutely seen in our Blue Chip, Ferrari, and German Car indices, which all jumped at double-digit rates — the Blue Chip at 10%, the Ferrari index at 15%, and the German index showing the most strength at 16%. This is the first time since January 2008 that the three premier indices have achieved this feat. This is also the first time since early 2011 that all three have increased their rate of growth for three consecutive periods. If you thought sale results seemed superheated, they are.

Furthermore, Book 22 saw the largest percentage of movement in excess of 5% since May 2008, with 10% of the book’s approximately 20,000 listings moving at that rate.

Even with those remarkable four-month gains, movement seems to be more restrained than we saw leading up to the market correction of 2008, as odd as that may sound. In the heady days of January 2008, for example, the Blue Chip notched a 33% increase, the Ferrari Index recorded a 39% move, and the German Index blipped up a relatively relaxed 12%. Furthermore, sources report that while broker and speculator activity is picking up, it is still minimal overall. Buyers and end users are one in the same at the moment, unlike during the famous 1990 collector car bubble.

What is less apparent is the movement outside of the headlines. The three indices that best represent the bulk of the market (cars in the sub-$100,000 range) saw only modest gains, with the British Index inching forward by 3%, and the Affordable Classics and 1950s American indices standing firm. Growth year over year is at 4% and 3%, respectively. Hagerty also tracks market performance of 25 of its clients’ most popular cars, and this “Popular” Index showed gains of 3% and is now 5% improved from a year ago. In short, while the top of the market is raging full on, the cars that most people buy are also realizing gains, even if they are minor ones.

In practical terms this means that most cars in most cases, if bought with due diligence, look like they will return their purchase price as well as enough to cover operating and ownership expenses when they are sold a few years down the line.

If you wish to find the value changes of your classic, please visit our Valuation Tools.

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