Discussion
If there's one thing to be sure it's that humans never learn.
The manic engineered south east housing bubble will shortly implode and the classic car bubble will thus follow..
http://www.pistonheads.com/classifieds/used-cars/p...
The manic engineered south east housing bubble will shortly implode and the classic car bubble will thus follow..
http://www.pistonheads.com/classifieds/used-cars/p...
Already crashing here: http://www.pistonheads.com/gassing/topic.asp?h=0&a...
Are we in a car bubble? Absolutely. The indicators/attitudes are all there:
1. Rapid price rises. Check.
2. Easy/growing availability of credit. Check.
3. Speculation on an epic scale. Check.
4. Perceived expert knowledge by general population, and belief that increase in wealth is the result of superior insight or intuition. Check.
Considering most threads on the subject cannot even differentiate between an "investment" and "speculation", I would say we are well into the bubble.
1. Rapid price rises. Check.
2. Easy/growing availability of credit. Check.
3. Speculation on an epic scale. Check.
4. Perceived expert knowledge by general population, and belief that increase in wealth is the result of superior insight or intuition. Check.
Considering most threads on the subject cannot even differentiate between an "investment" and "speculation", I would say we are well into the bubble.
Does a bubble not require available stock to feed it?
I would imagine that the classic car market is like the housing market, there is a severe lack of stock, helping to drive the "bubble". The primary difference though is that unlike houses you can not simply build more stock to satisfy the market.
Whilst I have no doubt that there is an element of crazy to the current price rises, I don't see it in quite the same way as a housing market bubble. Even with these it doesn't really take that long for prices to return to previous levels.
There is way too much discussion about this at the moment and not enough about driving them, but for those of us that bought years ago this is great. For those contemplating buying this is getting scary. There is no doubt that these cars will need work at some point, whilst the value was half what they are now, there was space to move and you could still see a long term point. But with prices heading up, the same risk of buying something that need big money is the same, but the starting point is a lot higher.
As an example, last week I was looking at a 930 shell that had been stripped and was ready for blasting clean. It had aircon fitted, and where the lines went down the tops of the wings, the inner wing was like swiss cheese. This was in such a location that you wouldn't see it whilst the wings were on the car. These kinds of things can hide in lots of places.
I would imagine that the classic car market is like the housing market, there is a severe lack of stock, helping to drive the "bubble". The primary difference though is that unlike houses you can not simply build more stock to satisfy the market.
Whilst I have no doubt that there is an element of crazy to the current price rises, I don't see it in quite the same way as a housing market bubble. Even with these it doesn't really take that long for prices to return to previous levels.
There is way too much discussion about this at the moment and not enough about driving them, but for those of us that bought years ago this is great. For those contemplating buying this is getting scary. There is no doubt that these cars will need work at some point, whilst the value was half what they are now, there was space to move and you could still see a long term point. But with prices heading up, the same risk of buying something that need big money is the same, but the starting point is a lot higher.
As an example, last week I was looking at a 930 shell that had been stripped and was ready for blasting clean. It had aircon fitted, and where the lines went down the tops of the wings, the inner wing was like swiss cheese. This was in such a location that you wouldn't see it whilst the wings were on the car. These kinds of things can hide in lots of places.
I agree Redback, apart from number 2.
I was discussing this with my Porsche man the other day and the cars that are being bought aren't generally by people who need finance to buy. It's collectors and people with general wealth, who plan to sit on the cars longterm.
As such even if a few people panic sell in the future, the majority of "investors" will just ride it out.
Let's face it, only oil running out will wipe massive amounts off the longterm value of classics. Failing that, even if there is a crash, correction or whatever, there'll be another boom/rise in another 20 years by the time I'd want out of one.
And all that is before you consider the cars that are leaving blight for foreign markets.
We are in silly times though! I couldn't bare to even pay £30k for a 3.2 Carrera, let alone £40-odd, which is the true price of the Malton car iirc. To pay that for something that was worth £15k-£18k a few years ago would be too much for me to stomach. Crazy!
I was discussing this with my Porsche man the other day and the cars that are being bought aren't generally by people who need finance to buy. It's collectors and people with general wealth, who plan to sit on the cars longterm.
As such even if a few people panic sell in the future, the majority of "investors" will just ride it out.
Let's face it, only oil running out will wipe massive amounts off the longterm value of classics. Failing that, even if there is a crash, correction or whatever, there'll be another boom/rise in another 20 years by the time I'd want out of one.
And all that is before you consider the cars that are leaving blight for foreign markets.
We are in silly times though! I couldn't bare to even pay £30k for a 3.2 Carrera, let alone £40-odd, which is the true price of the Malton car iirc. To pay that for something that was worth £15k-£18k a few years ago would be too much for me to stomach. Crazy!
The thing is how many are in it to make money and how many are enthusiasts?
I'll have none of the "it's different this time"
The housing bubble is a ponzi scheme. Mr Chinaman buys prime London, sits on it for two years and sells it for 20% more. Money for nothing.
We then have this sort of caper.
http://www.telegraph.co.uk/motoring/classiccars/10...
When you get ramped up perceived values you will get much egg on ones face if/when sentiment turns.
Knackered then restored welded up LHD pre impcat bumper ex USA targa S's are not worth £100k plus.
Any punter putting his money there can do as he pleases but good luck to him.
3.2's are a smashing 911. Especially the G50. But they are pretty much porridge as far as the marque goes.
The good thing is that half decent 3.2's can be found for mid 20's private.
I sold three of my micro's recently as I smell the top big time..
I'll have none of the "it's different this time"
The housing bubble is a ponzi scheme. Mr Chinaman buys prime London, sits on it for two years and sells it for 20% more. Money for nothing.
We then have this sort of caper.
http://www.telegraph.co.uk/motoring/classiccars/10...
When you get ramped up perceived values you will get much egg on ones face if/when sentiment turns.
Knackered then restored welded up LHD pre impcat bumper ex USA targa S's are not worth £100k plus.
Any punter putting his money there can do as he pleases but good luck to him.
3.2's are a smashing 911. Especially the G50. But they are pretty much porridge as far as the marque goes.
The good thing is that half decent 3.2's can be found for mid 20's private.
I sold three of my micro's recently as I smell the top big time..
I am no economist, but I know a bit about cars and car enthusiasts.
I don't think the air cooled rises are a bubble at all. I think its a correction in the market, a catch up. Yes, theres a few crazy priced cars about at the moment, especially 964 and 993 turbos, but generally I think its sustainable. Thats not to say that they will continue to rise at the current rates but I don't see them coming down.
Why?
1. New cars becoming more detached and nannying
2. Because of the above, an increasing demand for older 'proper' sports cars
3. A very limited supply that is only going to reduce
4. The increasing 'cool' factor of older cars and especially Porsches
5. An ever expanding world market for classic cars
6. A continued increase in the 'weekend car' just for fun.
7. The internet!
8. And the biggest reason of all, they are fantastic!
Unless there is a major economic world implosion, such as a war, I am certain that the values will only go up.
I don't think the air cooled rises are a bubble at all. I think its a correction in the market, a catch up. Yes, theres a few crazy priced cars about at the moment, especially 964 and 993 turbos, but generally I think its sustainable. Thats not to say that they will continue to rise at the current rates but I don't see them coming down.
Why?
1. New cars becoming more detached and nannying
2. Because of the above, an increasing demand for older 'proper' sports cars
3. A very limited supply that is only going to reduce
4. The increasing 'cool' factor of older cars and especially Porsches
5. An ever expanding world market for classic cars
6. A continued increase in the 'weekend car' just for fun.
7. The internet!
8. And the biggest reason of all, they are fantastic!
Unless there is a major economic world implosion, such as a war, I am certain that the values will only go up.
mollytherocker said:
I am no economist, but I know a bit about cars and car enthusiasts.
I don't think the air cooled rises are a bubble at all. I think its a correction in the market, a catch up. Yes, theres a few crazy priced cars about at the moment, especially 964 and 993 turbos, but generally I think its sustainable. Thats not to say that they will continue to rise at the current rates but I don't see them coming down.
Why?
1. New cars becoming more detached and nannying
2. Because of the above, an increasing demand for older 'proper' sports cars
3. A very limited supply that is only going to reduce
4. The increasing 'cool' factor of older cars and especially Porsches
5. An ever expanding world market for classic cars
6. A continued increase in the 'weekend car' just for fun.
7. The internet!
8. And the biggest reason of all, they are fantastic!
Unless there is a major economic world implosion, such as a war, I am certain that the values will only go up.
This +1I don't think the air cooled rises are a bubble at all. I think its a correction in the market, a catch up. Yes, theres a few crazy priced cars about at the moment, especially 964 and 993 turbos, but generally I think its sustainable. Thats not to say that they will continue to rise at the current rates but I don't see them coming down.
Why?
1. New cars becoming more detached and nannying
2. Because of the above, an increasing demand for older 'proper' sports cars
3. A very limited supply that is only going to reduce
4. The increasing 'cool' factor of older cars and especially Porsches
5. An ever expanding world market for classic cars
6. A continued increase in the 'weekend car' just for fun.
7. The internet!
8. And the biggest reason of all, they are fantastic!
Unless there is a major economic world implosion, such as a war, I am certain that the values will only go up.
langdale said:
mollytherocker said:
I am no economist, but I know a bit about cars and car enthusiasts.
I don't think the air cooled rises are a bubble at all. I think its a correction in the market, a catch up. Yes, theres a few crazy priced cars about at the moment, especially 964 and 993 turbos, but generally I think its sustainable. Thats not to say that they will continue to rise at the current rates but I don't see them coming down.
Why?
1. New cars becoming more detached and nannying
2. Because of the above, an increasing demand for older 'proper' sports cars
3. A very limited supply that is only going to reduce
4. The increasing 'cool' factor of older cars and especially Porsches
5. An ever expanding world market for classic cars
6. A continued increase in the 'weekend car' just for fun.
7. The internet!
8. And the biggest reason of all, they are fantastic!
Unless there is a major economic world implosion, such as a war, I am certain that the values will only go up.
This +1I don't think the air cooled rises are a bubble at all. I think its a correction in the market, a catch up. Yes, theres a few crazy priced cars about at the moment, especially 964 and 993 turbos, but generally I think its sustainable. Thats not to say that they will continue to rise at the current rates but I don't see them coming down.
Why?
1. New cars becoming more detached and nannying
2. Because of the above, an increasing demand for older 'proper' sports cars
3. A very limited supply that is only going to reduce
4. The increasing 'cool' factor of older cars and especially Porsches
5. An ever expanding world market for classic cars
6. A continued increase in the 'weekend car' just for fun.
7. The internet!
8. And the biggest reason of all, they are fantastic!
Unless there is a major economic world implosion, such as a war, I am certain that the values will only go up.
Also I don't think I could bare parting with my 3.2C for any money. Great fun to drive and I like it more than any car I've had.
Interesting thread.
My view is that there are lots of people (men), who are pretty debt free and are seeing their saving eroded because of crappy returns on investments, hence they have decided to spend some money on depreciation free (mostly) fun.
Its a bit like people (men) who blow tons of money on vintage Rolex/Patek watches. Not completely bullet proof, but if people are sensible they can have the joy of ownership in the knowledge that they will not really cost you anything when they come to flog it. Also unlike painting, jewelry, property, etc, watches (and I think) cars do not attract Capital Gain Tax (yet) when you sell them. Important if you are sell your 964 RS for £225K having paid £60K for it.
Personally the way I look at it is that my 964 cost about £40K in 1990 and its now worth £30k+ - whoppee do!! Just 10K in the hole then :-)
When the crash comes (and it will) the people who will catch a cold are those who have borrowed money to "invest" in cars on the assumption they will continue to go up in value. For those who have just buy them to enjoy, then they will just view it as depreciation. A new car for example can lose 50% of its value in 3 years so why not a classic car??
My view is that there are lots of people (men), who are pretty debt free and are seeing their saving eroded because of crappy returns on investments, hence they have decided to spend some money on depreciation free (mostly) fun.
Its a bit like people (men) who blow tons of money on vintage Rolex/Patek watches. Not completely bullet proof, but if people are sensible they can have the joy of ownership in the knowledge that they will not really cost you anything when they come to flog it. Also unlike painting, jewelry, property, etc, watches (and I think) cars do not attract Capital Gain Tax (yet) when you sell them. Important if you are sell your 964 RS for £225K having paid £60K for it.
Personally the way I look at it is that my 964 cost about £40K in 1990 and its now worth £30k+ - whoppee do!! Just 10K in the hole then :-)
When the crash comes (and it will) the people who will catch a cold are those who have borrowed money to "invest" in cars on the assumption they will continue to go up in value. For those who have just buy them to enjoy, then they will just view it as depreciation. A new car for example can lose 50% of its value in 3 years so why not a classic car??
Glaston said:
Interesting thread.
My view is that there are lots of people (men), who are pretty debt free and are seeing their saving eroded because of crappy returns on investments, hence they have decided to spend some money on depreciation free (mostly) fun.
Its a bit like people (men) who blow tons of money on vintage Rolex/Patek watches. Not completely bullet proof, but if people are sensible they can have the joy of ownership in the knowledge that they will not really cost you anything when they come to flog it. Also unlike painting, jewelry, property, etc, watches (and I think) cars do not attract Capital Gain Tax (yet) when you sell them. Important if you are sell your 964 RS for £225K having paid £60K for it.
Personally the way I look at it is that my 964 cost about £40K in 1990 and its now worth £30k+ - whoppee do!! Just 10K in the hole then :-)
When the crash comes (and it will) the people who will catch a cold are those who have borrowed money to "invest" in cars on the assumption they will continue to go up in value. For those who have just buy them to enjoy, then they will just view it as depreciation. A new car for example can lose 50% of its value in 3 years so why not a classic car??
I agree that if you have borrowed money to make a profit then you will want to offload sharpish on a depreciating asset. My view is that there are lots of people (men), who are pretty debt free and are seeing their saving eroded because of crappy returns on investments, hence they have decided to spend some money on depreciation free (mostly) fun.
Its a bit like people (men) who blow tons of money on vintage Rolex/Patek watches. Not completely bullet proof, but if people are sensible they can have the joy of ownership in the knowledge that they will not really cost you anything when they come to flog it. Also unlike painting, jewelry, property, etc, watches (and I think) cars do not attract Capital Gain Tax (yet) when you sell them. Important if you are sell your 964 RS for £225K having paid £60K for it.
Personally the way I look at it is that my 964 cost about £40K in 1990 and its now worth £30k+ - whoppee do!! Just 10K in the hole then :-)
When the crash comes (and it will) the people who will catch a cold are those who have borrowed money to "invest" in cars on the assumption they will continue to go up in value. For those who have just buy them to enjoy, then they will just view it as depreciation. A new car for example can lose 50% of its value in 3 years so why not a classic car??
In fact if you haven't borrowed money but fancied having a punt you will probably get very twitchy and want to get out.
Per the last crash (which people always seem to forget) an influx of machines owned by non enthusiasts looking for a profit caused the last implosion and I fear will again. Foreign or not.
The London housing bubble is overseas money buying prime property to sit on (not even rent) to flog to another foreign buyer for a % profit. When confidence goes and people want out all hell breaks loose.
Now if you happen to be an enthusiast it matters not as you are into your machine. But as per property mr normal is being priced out by speculation.
In short 40 grand plus for a 3.2 is over the odds as much as £300K for a DB6 Aston.
I accept prices rise but there seems to be a lot of chancers asking stupid money.
..
I am an enthusiast (mostly Porsche), not a car investor. I own two Porsches (964 and SC) and a daily driver RS4 - none particularly high value. I find myself sitting on the fence in this whole debate - drawn in both directions. I want values to fall as there are so many cars I want to own/experience, but fear I may never own some of my dream cars if prices continue to rise exponentially.
I agree with the whole analogue driving experience argument, modern cars are too fast/capable to be enjoyed on the road, depreciation-free motoring, classic cars are cool etc.
But based on my own justification for owning the cars I do, some things worry me:
People may not be directly using finance to buy classic cars, but low mortgage costs are indirectly funding this market. Rates will rise at some point albeit gently and not to levels seen pre crisis. I'm sure many owners are debt-free but the marginal owner is not, IMO.
I would not own a 2nd Porsche if it was depreciating/falling in value. How many other people are able to justify 2nd/3rd/4th cars on the grounds of "free" motoring. I've spent 10k on my 964 in 2 years, it's much easier to stomach this when values are rising. While I will keep a weekend car regardless of values, I'm sure there are plenty of less committed owners who will be shaken out as soon as values wobble.
On the supply side, the pool of cars is growing, not shrinking, today's new cars are tomorrows classics. Yes they are less engaging compared to older machinery but that argument has always been there (end of the longhood, end of the 911, end of aircooled, end of no driver aids, end of manual gearbox, now electric steering......................).
I've no idea where it all ends. It's hard to value a non-income-generating asset and I can't see what breaks the market but nothing goes up in a straight line.
I agree with the whole analogue driving experience argument, modern cars are too fast/capable to be enjoyed on the road, depreciation-free motoring, classic cars are cool etc.
But based on my own justification for owning the cars I do, some things worry me:
People may not be directly using finance to buy classic cars, but low mortgage costs are indirectly funding this market. Rates will rise at some point albeit gently and not to levels seen pre crisis. I'm sure many owners are debt-free but the marginal owner is not, IMO.
I would not own a 2nd Porsche if it was depreciating/falling in value. How many other people are able to justify 2nd/3rd/4th cars on the grounds of "free" motoring. I've spent 10k on my 964 in 2 years, it's much easier to stomach this when values are rising. While I will keep a weekend car regardless of values, I'm sure there are plenty of less committed owners who will be shaken out as soon as values wobble.
On the supply side, the pool of cars is growing, not shrinking, today's new cars are tomorrows classics. Yes they are less engaging compared to older machinery but that argument has always been there (end of the longhood, end of the 911, end of aircooled, end of no driver aids, end of manual gearbox, now electric steering......................).
I've no idea where it all ends. It's hard to value a non-income-generating asset and I can't see what breaks the market but nothing goes up in a straight line.
Glaston said:
Interesting thread.
. A new car for example can lose 50% of its value in 3 years so why not a classic car??
Because they don't make them anymore !. A new car for example can lose 50% of its value in 3 years so why not a classic car??
- the basic rule of every business is supply and demand - it would appear that by nature of a car being a classic it needs to be at least 25 years old, which means they are no longer manufactured, additionally a high number of the amount produced will have been written off/scrapped etc - and there are now a high number of enthusiasts of the "poster generation" ( who had the poster on the bedroom wall but no money to buy them ) who no longer have the poster but now have the funds to purchase and going back to point one - there are a limited number of the car they want to buy available - simple really !
hunter 66 said:
Once Jag XJS and Dolomites are " collectors " and "future investments " .........it is a bubble
Couldn't agree more. We all like a Giulia Super but a 1750GTV it aint...Madness.
http://www.carandclassic.co.uk/car/C499491
If your're going to sling £25k somewhere Alfa then this is a much better bet.
Original NOT restored. Low miles. Low owners. RHD and being a magnificent Bertone coupe. Shame about the colour but you can't have it all!
http://www.carandclassic.co.uk/car/C489420
Edited by P50 on Thursday 22 May 15:10
I hope it is a bubble. Doubt it though. Curious what happens when/if China catches on.*
If a burst bubble means cheaper cars, cheaper parts, cheaper restorations and cheaper work... whats not to like as a 911 owner?
* I recently read that the chinese buyers consider the 991 a car for women because its "cute" and "small". Allegedly the men only care about big stretched BMW 7ers, A8, Rolls Royce, etc, so the answer may very well be "never", but I digress.
If a burst bubble means cheaper cars, cheaper parts, cheaper restorations and cheaper work... whats not to like as a 911 owner?
* I recently read that the chinese buyers consider the 991 a car for women because its "cute" and "small". Allegedly the men only care about big stretched BMW 7ers, A8, Rolls Royce, etc, so the answer may very well be "never", but I digress.
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