Evans contemplatest he impact of the coronavirus on the stateside classic car market.
As I write these words, spring is just about here in the Great Lakes. Normally, that means a flurry of activity in classic car circles as garages open and enthusiasts from Dearborn to Dunkirk realise the fruit of their laborious winter tinkering and get ready to hit the road, drag strip, road course, or even look to sell (in order to take advantage of a hot spring market). This year however, with the rapid spread of the coronavirus pandemic and drastic measures taken, such as the closing of restaurants and many non-essential businesses, combined with the volatility in the stock market, there are already good indicators that, like employment and housing, the classic car market will likely be affected.
Michigan-based classic car insurer Hagerty has already pointed to some potential trends happening, namely the sub-$100,000 category of classics, which includes a lot of traditional Detroit Iron that will likely be affected by this crisis. Most cars in this price bracket tend to be owned by people who have full-time jobs and likely a single house, meaning that during a downturn, a toy in the garage is often one of the first things to go.
And given that we’ve tended to see prices for many archetypal Fifties and Sixties Detroit classics level off in terms of demand over the last several years, the next several months (we’re talking 9-18 here) could possibly be a good time for those in the market for such a car or truck to take the plunge. Many popular American classics, such as 1955-1957 Shoebox Chevys, 1964-1970 Ford Mustangs, 1968-1970 Dodge Chargers etc. tend to inhabit the $30,000-$80,000 price bracket these days (aside from particularly rare and desirable models, such as fuelies, 428 Cobra Jets and Hemis).
As for higher priced so-called ‘Blue Chip’ cars, such as Hemi ‘Cudas and Challengers, Cl and C2 Corvettes, they often tend to be less impacted by economic downturns since many belong to wealthier individuals with diversified business interests and sizable collections. Nevertheless, there’s always the chance that some owners of these cars could be highly leveraged or their business could be significantly impacted by the downturn, such as restaurants, hotels, airlines and even real estate. As we witnessed in the Great Recession a decade ago, if certain sectors of the economy are particularly hard hit (and for prolonged periods) it can be an ideal opportunity for savvy enthusiasts to snap up the Detroit classic of their dreams.
At this juncture, it’s still too early to tell just how much of an impact the coronavirus will actually have on classic car demand. Prior to the outbreak, there’s been a lot of activity stateside regarding Eighties and even Nineties cars, as well as growth in demand for classic trucks and offroaders – everything from classic Ford Broncos and Chevy Blazers to Jeep Grand Wagoneers, driven often by Generation X buyers and Millennials who are looking to the vehicles they remember from their youth. Regardless of how things actually pan out, past history has shown us that, like everything else, classic car demand rises and falls, with some segments becoming super hot and then cooling significantly. When the economy does tank, as it did in the early Nineties and again a decade ago, many speculators (who can have a significant influence in driving prices up during boom times) flee the market, allowing real enthusiasts a chance to acquire the classics of their dreams. Even though we’ve seen a lot of emphasis on monetary value of classics over the last few years and some referring to their stable of antique vehicles as a ‘portfolio’, what’s important to remember is that we should all be in it for the cars, buying, driving and enjoying a vehicle because we want to do that, not because it might be worth more if we hold on to it for a few years and decide to sell it. Recessions, like thunderstorms, often have the ability to create a cooler, more rational climate after a period of intense heat and gusto. And whether it’s stocks, houses or classic cars, recessions are often the best time to find a deal and the car or truck you really want. My advice in these uncertain times, even for our UK readers, is to watch the stateside auctions, scan the classifieds and sites like Bringatrailer.com … you just never know what you’ll be able to find and ship back home!