With rising interest rates, stock market solid corrective drops and inflation..whats your take on how it will affect classic car prices? Looking at it from a 30,000 view one would think it must follow suit on some levels..However when Covid first hit us I thought it would dive bomb classic car sales, just the opposite happened..Any perspectives out there?

 

If people are dumb and continue to think we're not in a recession, then it may not matter. But food prices and utilities continue to rise, and gas is going to be spiking again, so once the layoffs start happening and the unemployment rates rise above 5% (and I believe it will), people will maybe start thinking about what's important to spend their money on. It may not affect those that are sitting on a mountain of money, but those that would normally buy wants over needs will definitely rethink their positions. Interest rates are rising, and probably will again soon, so it's going to affect EVERYTHING. Oil prices have already started factoring in recession pricing for futures, so they're already getting hurt, although because nothing is being done to increase supply, gas prices are likely going to go up from here. Housing prices are going to drop, so that's good, but there won't be anyone willing to pay 6.5 or 7% for their best 30 year rate. So housing sales will slow.

Don't look for a recession bottom for about another year at least. Just my guesstimate. It's going to get worse before it gets better. Especially if nothing changes.

Just my guess. I could be wrong. I lived through Carter and Reagan eras, and it wasn't pretty, but eventually things turned around.

 

Hagerty had this article this weekendhttps://www.hagerty.com/media/market...3800aff352a433

 

They are already dropping. Read this article from Hagerty.

Muscle car atrophy: these previously hot cars just dropped in value. | Hagerty Insider

 

Ditto you owe me a coke... Lol

 

I looked at the time and we both posted at 3:06. You had to be a few seconds ahead of me. But at the finish line it only takes a second or two. I will be good for a coke if our paths ever cross.

 

I was watching mecum Chicago yesterday, many big money cars stalled, one example, two numbers matching drop dead beautiful LS6 chevelles, automatic sold at 110, 4 speed at 120 I believe, minus the fees and your in the high 90’s low 100,000 take home cash. Same on some early 65 big block corvettes

 

Slow yes, but never go away. People will always be buying homes. Just my opinion, but people have gotten a little spoiled over interest rates over the past 15+ years. I bought my home in 2000 and the rate was 8.9%, which we considered good at the time. My parents bought theirs in 1967 at an 18% interest rate.
Rates always go up and down. Anyone who thinks that the 0-3% rates were going to last forever, isn't living in reality. The only thing that it might slow down (at least in my area) is the amount of McMansions that are being built all over the place.

When it comes to buying cars (be it new, used or classics), higher rates mean some reality might set in there also. Unless you own it, does anyone out there actually think that a '70 Chevelle is worth over 125k? Cmon!

For the most part, I don't think that the majority of us (Oldsmobile owners) will be affected as badly. Most of our cars are worth 50k or less, which makes them very affordable in the collector car market. Heck, it might even make our cars look more attractive and drive their values UP a little.

 

I've never seen a drop or recession of the economy where classic cars wern't affected.. The toys are usually the first to be affected.

 

They are a discretionary purchase. Recession will have a greater impact on them than interest rates. Most people buy necessities first then toys. Chip that is an interesting thought that people could move down to lower priced cars. I think this is going to be a long thread.

 

The world is in a correction or a return to normalcy. For the last 2+ decades everything has been artificially inflated to postpone the pain of multiple events affecting the financial system. It had been in place for far too long creating an atmosphere of too much money chasing too few things with pricing following the principle of supply and demand. Now that world banks are removing the punch bowl, markets and prices should return and stabilize back to normal which includes classic cars.

 

I don't have a crystal ball. My perception is often distorted on trying to nail down or understand the market. I do feel, the documented blue chip/investment quality cars will usually sell. I'm not surprised by the Hagerty article, so thanks for that. I can only guess that we'll see small adjustments in the future. The other cars I'll describe as #2 cars will take the bigger hit.

LIke many, I enjoy watching the big auctions. It seems the restored cars, what I describe as restored/day two type of vehicles that are show worthy but still be drivers, are the meat and potatoes of the market. I wonder that these cars are the ones that will take the biggest hit. I'm referring to the basic models for the most part that are really good looking or maybe a little oddball. The under 30K market. You can't restore these cars for some of the money they seem to bring. If you squint a little, you can almost afford them. I'm speaking for myself, humble opinion, I guess.

 

The wealthy will still be wealthy despite a recession. Dumping money in to a hard asset such as a blue chip muscle car isn't bad considering 401k's on average for this year are down 25%.

I saw both those LS6 cars yesterday at Mecum. They were nice but not 995+ cars. The upper echelon cars are still commanding the top dollar.

 

Specifically what was not correct or concourse on both those LS6 cars?
if the stock market drops 25% what makes you so sure the hard asset market of collector vehicles follow suit? Hard assets can be just as vulnerable

 

We are being told there isn’t a recession, everything is beautiful!

 

Exactly. Everything is "fine". Those who have ever dealt with members of the opposite s@x know this is not good.

 

Yeah, the top cars will bring the top money, but I don't care how great a car is, I can always find something not quite right with it. ALWAYS. The point will really come down to is if the people who have the cars are needing to sell, or just willing to sell. Big difference. Someone willing to sell but not having to can usually hold out for a greater price. Those needing to sell are willing to take more of a hit. The thought is better to get a handful of something than a truckload of nothing. With a smaller buying pool, you get less competition on bids or offers. So what used to take a week to sell, now takes months. Happens in the real estate market a lot.

Time will tell. We're JUST getting started with this recession and the dominos haven't all fallen yet. Until that happens, nobody is worried that much at the moment. But if things start to crumble, it'll crumble fast, and you don't want your azz stuck out in the wind. If you haven't bought or sold in the last few years, you may be better off holding for now. Especially if you've bought in the last few years paying top dollar. If you planned on purchasing a car, and can afford it, don't worry too much about it. 10 years from now you'll never miss that extra money you shelled out today. Get your dream if that's what you want. If you're flipping cars, that's going to stop pretty soon unless you really work hard at it.

Avoid buying now due to FOMO, or fear of missing out. Eventually, if things get bad enough, deals will surface. The market, in general, always turns around, one way or another. When it's high, it will go down, and when it's down, it will go back up. Just a matter of recognizing when that happens.

 

Well stated, Mike.

 

I've tightened my belt, no more weekly visits to the local Asian massage parlor.

 

Your a true economist..lol. Thats hilarious

 

The current situation has no past examples to base predictions on. Do the math on the interest payments alone on our 31 trillion in debt. At 10-12%, which is realistic, 60+% of our taxes will be needed just to pay interest. Maybe they’ll print more!
Expecting my car to have value as a driver only, and may be needed if they stop producing new cars.
Scary times. Was just offered 2.5x what I paid for my car. What do I buy? Gold? Land? Will lose kept as cash.
We’d have Weimar republic inflation now if the dollar wasn’t the world’s currency. That can change overnight.
Pray for our children and grandchildren, they’re screwed.

 

The way I see it, It is not all about the money

I will try to seek a next "care taker" of the machine my brother and I have been blessed with to take care of, past the other two owners have done previous to me.

I will know when I talk with the next keeper of the Olds

 

Just saw a '72 F-350 sell for $102,000 on Barrett Jackson. I guess all of our questions have been answered.

Prices are still silly.

 

I just watched an early Bronco restomod go for $200k, apparently there is still room for financial lunacy.

​​​​​​….

 

I would be pissed off if I were those. All they are inheriting from us is debt amd cultural rot.