In the early 2000s, the generation known as the Baby Boomers was flush with easy credit and cash from a booming stock market, and they spent a whole lotta money on cars. Not just new cars either; Boomers helped push the market for classic cars, especially those from the 1950s and 60s, through the roof. The Great Recession corrected some of the madness, though those that survived with their finances kept buying.
It seems, however, the market may have finally hit its saturation market. Rob Sass of Hagerty Insurance wrote an article for Car & Driver that claims the prices paid for classic American cars from the 1950s have flat lined, or in some cases even dropped.
The peak of the car-buying madness came in August of 2007, and prices haven’t even come close to “recovering” to those same insane levels. The value of a 1954 Buick Skylark Convertible (pictured above), for example, peaked at over $200,000. In January, a ’54 Buick Skylark convertible sold for just $110,000 at auction. That’s a precipitous drop if I’ve ever seen one.
many aren’t aren’t accruing any value either. Cars like the 1957 Chevy Bel-Air Convertible are worth the same today as they were right around the crash, which for those who bought these cars as investments, is a very bad thing. That said, there are some cars, like the Shelby Cobra, and just about anything with a HEMI, that are still considered investment grade, though not always. For example, the prices for the long-lusted-after Chrysler 300C Convertibles has stayed pretty much flat, HEMI or not.
Why is this happening? For one, many people simply don’t have the money to start even modest car collections anymore. Baby Boomers are getting older, and the pool of potential buyers is dwindling. The average car collector is 56 years old, but the next-biggest group of consumers, Millennials, don’t show the same interest in the vehicles of their grandfathers. Also, most of them can’t afford anything other than Grandma’s hand-me-down Oldsmobile Delta 88, nevermind dropping $40,000 or $50,000 on a collector car.
But it isn’t all bad news for investors, as the values of 1950s European cars has been soaring as of late, with a 1954 Mercedes gullwing race car nearing $30 million. Unfortunately for American car collectors, it appears the good times have come to an end, and the next few decades aren’t going to do the market any favors.
We could see a repeat of what happened to the market for cars from before World War II. As collectors die off, massive collections full of cars nobody really wants will hit the market, leading to a glut of classic vehicles to buy, but few buyers with the cash or interest in them.
The result? The most valuable vehicles will continue to accrue value, but the less-desirable, less-known models will continue to fall in value at best. At worst, the scrap value may exceed any collector value these vehicles once had. It seems impossible to consider, but if what they say about Millennials disinterest in cars is true, who will be left to take up the mantle after the last of the Boomers are gone?
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