Alfa Romeo Forums banner

1 - 20 of 44 Posts

·
Registered
Joined
·
1,520 Posts
Discussion Starter #1
Reading through the housing and credit squeeze, seeing neutral to negative earning reports, especially in retail, a Dollar that falls faster than the gas gauge in my 911, I feel the US is heading into recession even with more Fed-induced and expected interest rate cuts.

Of course there is the possibility of a government-led back out for the lenders to ease the credit market and always the possibility of interest rate declines in Europe, since they feel the squeeze of the weak dollar and declining export income.

Where does the classic car market go in this economy? We already see (the well expected) softening in the Americal Muscle Car market. What is next? How are European sports cars impacted? Will top notch "blue chip" cars hold the value, anything else will fall out? Are certain marques sheltered? Will Baby Boomers continue to pump money into realizing their dreams?

Opinions?
 

·
Registered
Joined
·
2,356 Posts
imo cars should NEVER be looked at as an "investment" ...collector items sure but all cars should be looked at as a hobby or a "toy"

its the "investment" guys who kill the prices for those of us who work our arses off to bring cars back from the dead and flat out ruin it for the general public as it does nothing but drive up the prices of EVERYTHING from the spark plugs all the way down to the air in the tires
 

·
Registered
Joined
·
887 Posts
I'm not an economist, nor do i play one on TV, but there was an interesting thing happen here in NJ.

There was a small car collection and museum here in Northern NJ. It was owned by a man who managed a hedge fund. He collected classic american convertibles.

I went in recently with my son, and was told the museum was clsoing, and the cars were being auctioned in February. This was just after the news of big losses in hedge funds were announced.

I don't know the market, but the appearence of 50 to 60 cars of similar type on the market can do nothing but dilute the market, and reduce the value. Of course, true Top Notch cars should hold their value, but expect second and third tier cars, to drop as those who feel less secure in thier future try to free up some cash, chasing the same buyers.

Of course, I'm an engineer, what do I know of markets?
 
A

·
Guest
Joined
·
0 Posts
with the upward movement of cash expect a small group to have more "toy" money and expect the collector market to remain steady, in part because the weak dollar means that good examples will sell out of the country, Alfa parts and cars seem to cost the same on both sides of the ocean, $100 or 100 euros, meaning real bargains for Europeans, most of my stuff appears headed for Germany. I wouldn't expect many Ferrari's or E-types to flood the market but middle class owners might get squeezed out of their GTV's and MG t's etc. Last time it was GTA's etc. going to Japan, Next year it might be easy to get $25,000 for a good GTV, that's less than 17,000 euros and probably 15,000 next spring. Any european members care to share their thoughts on the value of a good GTV (105 Bertone coupe), in euro's.
The parts supply will get worse, several Euro vendors are now offering finders fees for any size collection of NOS parts, so I would say that it has already started.
 

·
Registered
Joined
·
268 Posts
True, except that in Europe at this moment there is sufficient stock available that we do not want US Alfa's or MG's due to having them rebuilt to Euro spec will be too cost prohibitive. We definitely do not want vehicles with side marker lights, warning lights all over the dash, MPh gauges, impact bumpers, Spica injections etc.
Because this will usually mean RESTO PROJECT.
For the kind of car that there IS an interest in, check our companys website, which is more or less available now, though it seems to crash on Vista equipped PC's. Maranello.NL
We are currently selling 30K Euro GTV series 1, etc. (those are at or near REAL concours spec- not ADVERTISED as such, but true concours spec, original unmolested and unbodged cars.) So buying a US spec GTV2000 would probably be a total no no for us.
Likewise a Ferrari 308GTBi US spec. Mine is, but is totally rebuilt to Euro spec save for a few details. Horrendous to do though, and pricey!
Rik
 

·
Registered
Joined
·
1,520 Posts
Discussion Starter #6
Hi Rik,

Thanks for adding the dealer view on this. I think that the $ is not "weak" enough yet for more mundane/ high production cars to move from the US to Europe, i.e. anything lower than $50 - $75k or anything after 1967 when US-spec cars got a lot of the bad stuff attached to them that you mention - I do not anticipate a lot of plain-jane Giulias/ Giuliettas moving from the US to Europe yet ...

However, for the more unique type of cars, I assume that there is already a more global market and the weak Dollar helps a lot. Do you really care if the speedo reads km/h or mph in an early Appia or Flaminia Zagato or in a Fiat 8V :)

On the other hand, I know of two Alfa 2600 Sprint Zagatos for sale in the US. Yes, they are priced what I think outrageously in $ but both have not sold for a long, long time despite lots of European interest and a continued softening $. Might be though that this is the idiosyncrasies of the car itself that are at play here ...

Not sure if I buy the reasoning that there is so much cash floating around in the US to keep the classic car market going at its current rate (either Baby Boomers or because yields in other investment opportunities dried up). Also, this would also mean a fair deal of speculation should already be happening or start soon and I am unsure if I see this going on in any segment except the muscle car segment - Speculation is always a sign of markets reaching its peak. Thouhg I do have a fun story on the Abarth Zagato I sold early this yer that scared me a bit ...

Interesting discussion.

Mike
 

·
Registered
Joined
·
3,585 Posts
Well if the Euro dealers don't want the SPICA cars it is better for the those of us here in the US. The SPICA cars 69-74 run as well if not better than the weber cars, get better mileage, better emissions and are rarer. Keep in mind there was a time no one wanted 356 Karman hardtops.
 

·
Registered
Joined
·
409 Posts
I think it depends entirely on the collector car that is being offered as to what the market will do. If you are talking about a genuine rare collector car like an original 1969 Firebird T/A convertable (only 6 built), the value will not drop. The same is true of any rare collectable car whether a muscle car or 1930's classic, or v12 Ferrari. On the other hand, I think we are already seeing a softening of "garden variety" muscle cars from the 60's. Their prices were driven up by a frenzy of rich baby boomers trying to recapture their youth, but many are just not rare enough to justify the kind of prices people were throwing at them. The same is true of the 1950's hot rods. If you find an original 1950s era hot rod that was built with period correct parts, has a provenance from the 1950's, winner of an AMBR or similar trophy, the value will always be there. Building some tribute car that looks like a 1950's hot rod even if you use period parts, will probably not be as valuable.
 

·
Registered
Joined
·
268 Posts
Absolutely true.
The point is that REAL money doesn't get touched by a recession. If you have 200 mil in the bank, and want a V12 Ferrari, so what if there is a recession.
But this will only go for REALLY special cars, rare cars, one-offs, coachbuilt or ABSOLUTELY perfect vehicles. Because people who buy into this class of vehicles might not really see them as an investment, but they will most surely NOT only look upon it as purely emotional.
 

·
Registered
Joined
·
268 Posts
On Spica though..
We don't want this here because A it wasn't original equipment here. B because it is hard to get it adjusted the right way, few specialists here.
C because a set of Webers simply LOOKS cooler, and makes better noises, and maybe D because a set of carbs is part and parcel of the classic experience in owning an older Alfa.
that said, I have had over 100 older Alfa's, and with exemption of some types of Solex carbs, never had the least trouble into getting them to run at least moderately to averagely well. Which is really dead simple to do, even without special tools. To get them to run perfect, yes you need tools, but the same for Spica.
Mileage isn't really a concern. You buy a classic, and you know it won't return the same as say a Prius.
 

·
Registered
Joined
·
7,166 Posts
On the other hand, I think we are already seeing a softening of "garden variety" muscle cars from the 60's. Their prices were driven up by a frenzy of rich baby boomers trying to recapture their youth, but many are just not rare enough to justify the kind of prices people were throwing at them.
Prices are so high on some (basically) generic cars that IMO prices would have to come down more than half to approach any degree of reasonableness. Prices at BJ Scottsdale 2007 was simply nuts for Corvettes, Mustangs and Cudas (to name a few).
 

·
Registered
Joined
·
1,248 Posts
I think it depends on the kind of car. American muscle cars were the biggest winners in the recent past with big price run ups. This drove an industry creating clones and resto rods. Since many of these toys were bought by baby boomers playing with funds from home equity lines of credit, these types of muscle cars, whether real or clone cars, will likely show the biggest value drop off. For cars like most Alfa's, which are relatively inexpensive and did not experience a large run up in prices, I don't think you will see much of an impact.

The exception would be European cars that are unloved in the US. Cars like older Maserati's, most Lancia's, and Citroen SM's are valuable enough to ship back overseas and make a profit with a weaker dollar. Expect cherry examples of these types of cars to be snapped up by smart Europeans.
 

·
Registered
Joined
·
1,520 Posts
Discussion Starter #14
... or, in the case of Lancias, picked up by crazy Germans, living in SoCal, buying them in Switzerland ...


I am surprised that this topic does not find more discussion in here and I am not sure why. Maybe Alfa guys don't care where the value of classic cars are going and are not in it for mere investment purposes (A noble trait). Also, I assume Zinhead is right that most Alfas are not priced in the stratosphere.

By the way, I assumed that Baby Boomers are known for not buying cars on credit (Home equity or other) - While I am not a proponent of this view, it is always brought up why "this time" the run up in value is sustainable ...
 

·
Premium Member
Joined
·
6,243 Posts
This ir a timely issue

The financial world has enjoyed one of the greatest credit expansions in history. This has been accompanied by soaring asset prices--that's in the usual stocks, corporate bonds, commodities, real estate, as well as in art, and cars. In the latter the most sensational price gains have been in the "muscle cars".:eek:

The changes in the credit markets that began in May of this year are similar to those typically seen as a great boom changes into an equivalent contraction.

Not all asset classes peak in price at the same time, but if the past continues to guide most, if not all, will eventually come down in price.:(

One should not consider interesting cars or one's home as an investment, or even as a way to make money.

However, the last car mania was in sports racing cars and you had to have a good one to go vintage racing. The action topped in 1989 along that general boom. For example, the Ferrari 275 GTB 4-cam soared to over a million dollars and then slumped over a number of years to about $300,000. I did a chart on it and used this model as having good "collectibility" and with some 300 examples there is reasonably good trail of numbers.

Got them from the Ferrari Market Letter. It has been a while since I looked at this so it is all recollection.

Last week I got in touch with the guys at the Letter and hope to get the data soon to bring the chart up to date.
 

·
Registered
Joined
·
409 Posts
I think a typical example of what to expect in the market would be the Amphicar that sold at Barratt-Jackson a couple of years ago. I think some of the comentators on Speed wondered what that car was even doing at a Barrat-Jackson auction and the car sold for $135k + buyer's premium. Suddenly at last years Barratt-Jackson auctions Amphicars came "out of the woodwork". None sold for much over $50,000 and that is probably still high for the market. As far as muscle cars go, almost anything made in the 60's-early 70's with a big motor is selling for crazy money. Dynacorn has come out with repop bodies for first gen Camaros, and they are talking of doing bodies for Mustangs, Cudas, and I'm not sure of Firebirds, or Challengers. I suspect the market will stay strong for restored, original, numbers matching muscle cars with provenance. I think the market for reto-mods or clones of the same era muscle cars will probably stay about where street rod prices are. Depending on the workmanship and quality of the build they will probably be priced around $20k-$50k. If you get one built by a "star" like Foose, Trepannier, or Boyd, those cars will probably be worth more for the celebrity factor. The same may be true for the limited run of Bandit Trans Ams that Year One is doing. None of these cars will probably be worth as much as it would cost to build them, perhaps a Dyna Corn bodied repop 1969 Camaro that is built as a base model for $25K-$30k would be worth what it costs to build it; but if the builder equips it with a high dollar motor, and trick suspension and a lot of billet, the price to recover expenses won't be there.

That was a good point made about European cars going back home. This is especially true of British cars. British Heritage Foundation or whatever it is called, makes parts available to restore most of the post war British sports cars. Most of those cars were sold in the US after WW2 to bring dollars into the UK to bolster the economy. The Brits had to wait years to get their own cars on the home market, because something like 70% of the production was destined for the American market. MG's, Triumphs, Healeys, and Jags are being sold in the U.S. to Brits who are shipping them back to the UK and converting them over to right hand drive. The one anomally that I haven't been able to figure out is the value of the big Healeys compared to the value of E-type Jags. A first class restoration of a Jag E-type roadster goes for $50k-$80k, while a similarly restored Healey 3000 goes for over $100k.
 

·
Banned
Joined
·
6,139 Posts
I think there are a lot of people here in the US that bought cars as investments, and are now regretting it. In the current economy, there are few "average" people who can afford second "play-toy" cars, and those who can afford it are the ones that have so much money a recession doesn't matter.

I would love to have an Alfa, as I haven't had one for something like 8 years now....the problem is that I can not find a "needs nothing" car for what I can afford to spend given the state of the economy. A really good, but not concours 105 series car is at least $15,000 and probably closer to $20,000, and a 750 or 101 is even more money..
 

·
Registered
Joined
·
1,520 Posts
Discussion Starter #18 (Edited)
Interesting point of views. It seems the consensus is, that:
  • Good, collectible cars with the usual rarity, provenance and immaculate condition will stay where they are
  • The muscle market will still come down, especially all the crappy, cloned and "cheap" stuff
  • For most of our cars, prices will stay stable as well since the base price is relatively low and the run up was not as dramatic as with other cars
Seems to make sense though I am not sure on the last one. Without having done a substantial analysis, I assume that classic cars increased ~20% p.a. over the last five years - some cars and marques more, some a bit less. All driven by "cheap money", rich old guys (.e. Baby Boomers), a falling dollar and healthy economies in NA, Europe and surpisingly a return in Japan.

However, with everything currently going on, I expect a correction that follows the housing market, just delayed as it normally is with assets. I assume ~20 - 25% in decrease in value with way lower appreciation rates going forward (Again, different per car segment and marque/ type).

For most of us, it is good that it does not matter too much for tow points:
  • Our cars have a relatively "cheap" base price (Giulias, Giuliettas, 91, 356s, etc.). I assume that most of us also have (relatively) stable careers with (relatively) higher disposable income. So it does not matter as much if a car runs up from $11k to $20k or $20k to $40k, most of us could somehow "wing it" (I hope. Though all of us have their "make or brake" point)
  • Most of us also have their cars for a long time. Given the value increase, a dip does not hurt that much and most don't plan on selling anyway - Drive the **** things
I think there are a lot of people here in the US that bought cars as investments, and are now regretting it.
Not sure on this one either. I have just learned that a good friend of mine sold a nice driver (Not even close to concourse) 67 911S with a sunroof for double the price he bought it for 3 months ago. If you thought that $60k would bring you a driver of those, think again ...

Folks that regret it might be the ones who bought second rate American Muscle or the ones that bought my double bubble trying to make a huge profit :). The Arizona auctions should give another hint on this. I am still unsure on the rule that cars as an investment is a bad idea. I think it can be a quite good idea but only if you love old cars, are well versed in buying the right stuff, are willing to hold them (And hopefully use them) for a longer period, if you have the disposable income due to the inherent higher risk and really need to diversify your portfolio.

By the way, after being 9 years in the hobby now (Still a newbie), I learned that there is not a "needs nothing" classic car, Stu. There is always something you can and should do with them ... all the time ...
 

·
Registered
Joined
·
3,964 Posts
...
However, with everything currently going on, I expect a correction that follows the housing market, just delayed as it normally is with assets. I assume ~20 - 25% in decrease in value with way lower appreciation rates going forward (Again, different per car segment and marque/ type).
...
Mike,

I don't agree that that 'investment-grade' classic cars (not muscle car clones) will decrease in value--at least in US dollar terms. There are some significant divergences between the classic car market and the housing market. The most important of these is the fact that you can ship a car across the US or across an ocean to sell it (don't try that with your house...). Assets that can easily be sold to non-US dollar environments will continue to seem like relative bargains based on the dollar exchange rate slide.

But, as others have correctly pointed out, second- or third-tier cars will indeed decline in value, or at least not increase at a worthwhile rate.
 

·
Registered
Joined
·
268 Posts
there are many people out there still buying second class cars dressed up as first class cars, shiny paint job and all. These are the cars that are hitching up to increasing first class car prices.
It is these cars that will really drop in the weeds as the market flattens out.
Discerning buyers can and will see these cars for what they are. Since there are a lot of these cars around it will be taken for granted 'that the prices are going down'. All the while REAL first class cars will still be getting more expensive.
Does my english make sense?
Getting a REAL first class resto job done is really not getting cheaper!!!!
 
1 - 20 of 44 Posts
Top