Auction sales during Monterey Car Week saw a 3% decrease from the previous year, largely attributed to a shift in preference towards newer cars. This shift has resulted in a surplus of unsold classic cars from the 1950s and 1960s. Total sales at the five main auctioneers in Monterey, including RM Sotheby’s, Broad Arrow, Gooding & Company, Mecum, and Bonhams, amounted to $391.6 million in sales this year, down from $403 million in 2023. The decline in sales has been a trend, with a 14% decrease noted last year compared to the peak of 2022.
Experts point to the oversaturation of auctions as a contributing factor to the decline in sales. The market is flooded with similar classic cars, leading to weak demand and subsequently low sales prices. Simon Kidston, a leading advisor to wealthy car collectors, noted the abundance of similar ‘product’ at the auctions, questioning whether sellers had considered the saturation of the market and the competition for the same set of buyers. Additionally, many entries had been on display in dealer windows for extended periods, further diminishing their desirability.
A significant shift in car collector demographics has also impacted the classic car market. A new generation of collectors, primarily Gen Xers and millennials, are showing a preference for cars from the 1980s, 1990s, and 2000s. This shift in preference is reflected in the sell-through rate, with pre-1981 cars priced at $1 million or more experiencing an anaemic 52% sell-through rate. In contrast, cars less than 4 years old had a much more robust sell-through rate of 73%, demonstrating the influence of younger collectors in shaping the market.
Apart from changing preferences and market saturation, high-interest rates are also cited as a factor influencing the classic car market. Financing has been a common practice at the lower end of the market, enabling buyers to build their collections. However, rising interest rates have raised the opportunity cost of investing in classic cars. Potential buyers are now weighing the returns they could earn by investing their money elsewhere, leading to a more cautious approach towards collector car purchases.
While certain rare and exceptional classic cars continue to command high prices, the broader trend indicates a transformation in the classic car market. Older collectors are gradually selling off or downsizing their collections, ushering in a new era dominated by younger collectors and modern supercars. The market is in a transitional phase, moving away from traditional classics of the past towards contemporary supercars. As the classic car market continues to evolve, the divergence between older and newer cars is expected to intensify, influencing prices and auction dynamics in the years to come.
The classic car auction scene is undergoing a period of significant change, driven by shifting collector preferences, market saturation, and economic factors. The days of vintage cars from the 1950s and 1960s dominating auction sales are giving way to a new era where newer models and modern supercars are taking center stage. As the market adapts to these transformations, both buyers and sellers will need to adjust their strategies to navigate the evolving landscape of classic car auctions.