Monterey auctions see decline in classic car sales as younger generation takes over

• Hagerty reports that out of the 1,143 cars available at Monterey Car Week, only 821 were sold, resulting in a 72% sell-through rate.
• Last year's average sale price of $477,866 was slightly higher than this year's average of $476,965.
• The market is being driven by a new generation of collectors, primarily Gen Xers and millennials, who favor cars from the 1980s, 1990s, and 2000s.

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The decline in auction sales during Monterey Car Week was 3% from the previous year, resulting in an accumulation of unsold classic cars from the 1950s and 1960s due to a change in consumer preferences towards newer models.

The total sales at the five car auctioneers in Monterey, including RM Sotheby's, Broad Arrow, Gooding & Company, Mecum, and Bonhams, decreased from $403 million in 2023 to $391.6 million in 2023, according to Hagerty, the classic-car insurance company. This was a 14% decline from the previous year, which was the peak of 2022.

Last year, 72% of the 1,143 cars up for sale were sold, with an average sale price of $476,965, down slightly from the previous year's average of $477,866, according to Hagerty.

Wealthy collectors are still confident and have plenty of money to spend, but their preferences for car types are shifting. Despite the recent rise in the stock market, the abundance of similar cars at numerous auctions has resulted in weak prices and sales.

"Simon Kidston, the founder of Kidston and a leading advisor to wealthy car collectors, stated, "It's saturation. When I walked around the auctions and saw so much similar 'product,' I asked myself if any of them had thought about what they or their rivals already had consigned, and if the cars were vying for the same buyers. Add to that the fact that many entries had already been in dealer windows for months or years which always feels like sloppy seconds.""

The market for classic cars is shifting, with younger collectors preferring cars from the 1980s, 1990s, and 2000s, while baby boomers are increasingly drawn to the classic cars of the 1950s and 1960s.

The sell-through rate for pre-1981 cars priced at $1 million or more in Monterey was only 52%, while the rate for cars less than 4 years old was a much stronger 73%. This indicates that young collectors are now in control of the market.

The value of Hagerty's Supercar Index, which includes sports cars from the 1980s to the 2000s, has increased by more than 60% since 2019. In contrast, the Blue Chip Index, which comprises classic cars from the 1950s and 1960s, including Corvettes, Ferraris, and Jaguars, has decreased by 3%.

Although a small number of rare true masterpieces will still command high prices, the top car of the week was a 1960 Ferrari 250 GT SWB California Spider that sold for $17 million at RM Sotheby's, and the runner-up was a 1938 Alfa Romeo 8C 2900B Lungo Spider, one of only five in existence.

The shift in ownership of classic cars among older collectors may negatively impact prices for older cars in the long term.

"According to McKeel Hagerty, CEO of Hagerty, the market is taking a break from the Enzo-era Ferraris, full classics, and '50s and '60s sports racers, as the modern supercar class is gaining popularity. The gap between older and newer cars is widening at an accelerated pace."

High interest rates are reportedly putting pressure on the classic-car market, with many buyers at the lower end using financing to purchase cars and build their collections, while at the high end, rising rates increase the opportunity cost of buying a classic car.

Having a great manager can make people consider purchasing a car that costs less than a million dollars, such as a collector car, which is partially an investment," Kidston stated. "The increase in the value of collector cars over the past 40 years is primarily due to the investment aspect.