Monterey Classic Car Auction Sees Market Shift Amid Economic Uncertainty

MONTEREY, California — The annual Pebble Beach Concours d’Elegance will showcase an impressive array of collectible cars on August 18, 2024. This event marks a crucial moment for the high-end classic car market, as an estimated $400 million in cars will be up for auction.

Approximately 1,140 classic cars will be auctioned this week during Monterey Car Week, with total sales expected to range between $367 million and $409 million, according to projections by Hagerty. A midpoint estimate of $388 million would indicate a third consecutive year of declining sales, which have dropped 18% from a peak of $471 million in 2022.

At this year’s auction, only one vehicle is expected to fetch over $10 million, the lowest number in over ten years. Meanwhile, the average sale price for cars has dipped slightly from $477,000 in 2023 to $473,000 now.

“Pebble Beach is the annual health check on the market,” said Simon Kidston, a classic car advisor and dealer. “Everybody waits to see what happens at Pebble Beach before committing to a major decision the rest of the year.”

The classic car market has faced challenges, akin to those in the art and collectible markets, with prices decreasing since their highs in 2021 and 2022. The Knight Frank Luxury Investment Index reports a decline in collectible prices by 2.7% over the past year. Classic car prices have seen a slight drop of 0.2%, better than the 20% decline in the art market but weaker than categories like jewelry and coins.

Market experts attribute the downturn to various factors, including global instability from ongoing conflicts in Ukraine and the Middle East, economic concerns in China, and rising interest rates which make purchasing classic cars less appealing.

McKeel Hagerty, CEO of Hagerty, noted that the decline is also rooted in a generational shift. Baby boomers, who have long been the backbone of this market, are aging out or downsizing their collections. Meanwhile, millennials and Gen Z are increasingly seeking newer models, leaving older vehicles with declining demand.

“It’s a big rotation,” Hagerty said. “The market is soft at the top end. But there’s a lot of depth in this market.”

This year, Gooding & Co. will auction three Ferrari 250 GT California Spiders, including a 1961 model rumored to sell for over $20 million. These cars have a notable presence in pop culture, having been featured in films like “Ferris Bueller’s Day Off.”

Just a few years ago, the alloy body Cal Spider would have likely sold for $25 million to $30 million, according to Kidston. “It’s one of the great road cars of all time,” he said.

Prices of classic vehicles over 50 years old have fallen significantly, with some seeing drops of 20% to 30%. Sellers are increasingly turning to private sales to avoid public embarrassment about reduced prices. “That way nobody has to feel embarrassed,” Hagerty explained.

Conversely, the auction market for supercars from the 1980s and beyond is thriving, as younger collectors are drawn to rare examples from this era. A 1989 Ruf CTR “Yellowbird,” sold earlier this year for $6 million at Gooding & Co.

In a notable change, the average sales year of the cars sold at Pebble has shifted from 1964 to 1974, hinting at changing preferences in this collectible space. Experts warn that the supercar market could be at risk of overspeculation.

“If it’s all solely reduced to what is more saleable, then collecting becomes very superficial,” Kidston cautioned. “Collecting should not be ruled by investment.”

Key auction highlights include a 1961 Ferrari 250 GT SWB California Spider Competizione expected to exceed $20 million, as well as numerous other iconic cars slated for auction this week.