With people worldwide sheltering in place due to COVID-19, the car industry (like many other industries) is seeing a sharp decline in sales. “According to J.D. Power, March 2020 sales were off by 39% compared to 2019. Sales for the first part of April are off 51% from the research company’s pre virus forecast. They estimate 301,000 fewer new cars have been sold so far this month compared to their sales forecast.”* Used car sales have also declined rapidly amidst the virus. Manheim (the Cox Automotive-owned auction company), reported that “Used-car sales fell 64% in the last week of March.** However, sales for Classic Cars and rare and collectible cars has remain strong despite the pandemic.
Many auto manufacturers have shifted from production of cars to producing medical equipment such as ventilators and masks. Events for luxury car and classic car collectors such as the Goodwood Festivals, the Greenwich Concours, and Gooding & Co.’s “Passion of a Lifetime” auction have all been cancelled or postponed.
Sales of Classic Cars Have Stayed Strong
There has been one bright spot for the automotive industry and that is the classic car market. Some auction houses dealing in vintage and collectible cars such as The Gooding & Co., have “done more and better private sales in the last few weeks than it would have during any typical springtime.”*** happy when doomsday passes,” On Bloomberg.com, Steve Serio, who specializes in finding and procuring expensive classics for high-net-worth clients recounted, “A handful of big cars have changed hands over the last few weeks, very quietly. A few were inspected prior to lockdown, and the triggers have been pulled. These buyers and sellers remain serious.”*** The market for collectable and vintage automobiles remains strong during this period of social lockdown, which has created some unusual opportunities for classic car enthusiasts.
Collector’s Priorities Have Shifted
During the pandemic, some collectors of classic cars have taken the opportunity to purchase the vehicle they have always dreamed of, adopting a “you only live once” philosophy. While some have taken the opportunity to sell cars they feel aren’t as important to them as they once were. Many classic car enthusiasts are looking for something fun to drive so they won’t feel as isolated by Coronavirus regulations. As a result, there are a lot of rare cars coming into the market that wouldn’t normally have been available and there is pent up demand for them.
Automotive Auction Houses Operating Online
Automotive auction houses such as Bonhams and RM Sotheby’s, are conducting online auctions and have seen web traffic and sales surge. One website that sells vintage cars online, reported selling a 1976 Porsche 930 Turbo Carrera for $110,000 in the first week of April.
High Demand of Classic Cars Doesn’t Mean Great Deals
Collectors should keep in mind that auction houses have never solely relied upon in-person bidders. Even the most elite auction sales have always included international callers, secret deals with private customers and buying agents. Therefore, the increased demand brought on by COVID-19 doesn’t necessarily translate into bargain deals. “On the buying side,” collectors “will always have lists of what they want to own next and on the selling side, they won’t sell a prized possession for beans just because a few car shows have been scuttled.”** In fact, in March a 1996 Porsche 911 GT2 topped sales with a $891,000 final bid at RM Sotheby’s, which would have been a high price for any time of the year, pandemic or not. Amidst a time of global uncertainty, collectors of luxury vehicles, classic car collectors, and vintage car collectors alike are continuing to pursue their passions and are helping to keep the classic car market going strong.
Whether you collect classic cars, exotic cars, wine, jewelry or art, make sure your collection is properly protected by collection insurance. McSweeney & Ricci’s Private Client Group provides access to custom collections and valuables coverage through premium partners (Hagerty, Pure, Chubb, Berkley One, and Hanover Prestige), along with high value home insurance and more.
Protect what you’re passionate about collecting. For more information on classic car collection insurance or for a complimentary review of your insurance coverage, contact McSweeney & Ricci’s Private Client Group by calling (844) 501-1361 or connect with us via email.
Sources:
*U.S. News & World Report “Coronavirus and Cars: What You Need to Know”
By John M. Vincent, 04/24/20
** “Automakers, rental firms fear coronavirus shutdowns could sink used-car prices” LATimes.com By David Welch and Keith Naughton-Bloomberg 04/13/20
*** Bloomberg.com “While Used Cars Pile Up in Lots, the Classics Are Busy Changing Hands” by Hannah Elliott 04/16/20