1 minute read
Hagerty Market Rating
We feel that this correction is inevitable and, to a certain extent, healthy.
The market went from
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irrational exuberance in 2021 to solid, rational demand over the course of this year. This indicates that the market is being driven by rational buyers and sellers, as opposed to speculators. For the Fund this means the market will focus on the best specimens with pricing expectations following underlying value fundamentals.
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The segments that have been particularly vulnerable to macroeconomic factors include vehicles worth sub-$150k, muscle cars (which unsurprisingly also tend to fall in that sub-$150k category), several of the 1960s and ’70s classics and up until the August Monterey auctions the older, more traditional classics. We’ve also seen some decreases in lower-quality examples that have been hitting the market in recent months. Notably absent from this list are analogue cars and cars of distinction – e.g. the Fund’s target vehicles.
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In fact, top-end, best specimen, and
analogue supercars seem
particularly removed from these concerns. Recent trends have allayed concerns that economic volatility will cool buyers’ enthusiasm with these segments especially.
TOP DOLLAR FETCHES TOP DOLLAR
We’re seeing signs of increasing separation between the most expensive cars and the rest. Economic pressures don’t seem to be hampering the top echelon of car collectors, they have done extremely well, and the top end of the market remains very healthy. Considering that high-net-worth and ultra-high-net worth make up this buyer audience, it is not surprising that the top of the market was most insulated from a future downturn, and that less-significant cars would feel any potential brunt first. In an environment which “everyman” classics mostly struggled to keep pace with inflation, the big-money cars rocketed up by an average of 17 percent. 1,21
Whilst the Fund fleet might not include the top dollar (+$1mm) vehicles (yet), we keep track of these big money cars for one key reason: the value trajectories of those at the top of the market give us critical insight into the performance of the market as a whole. Vehicles at the top of the market often set the pace for those
