An interesting article written by David Booth of Motor Mouth (http://www.motormouth.ca) follows.
One point to keep in mind is that in the USA, classic and exotic cars are treated as investments by the IRS, whereas in Canada, no such luck.
In fact, many of the high priced vehicles offered at US auctions are bought by a leasing company for the owners who turn around and lease the vehicle accordingly, thus being able to write-off the most of the lease.
In another article on another type of collection, an 11,000 piece model train collection, the largest collection in Canada, the collector was quoted as follows:
"it's a shame that more young people today don't share the same passion for collecting.
"Most of your collections now are going down in value because there's no demand for it," he said. "All us baby boomers, we got all these nice collections, but kids look at that like 'what do you want me to do with that?' They're not interested."
How true, my two sones are not interested in my die-cast collection.
Back to David Booth's article:
With Boomers paying big bucks to scoop all the cars, who's going to be able to buy what's left?
Driving’s videographer, our very own Clayton Seams, is, like so many in the creative arts, unique.
Admittedly talented and imaginative, his personal “style” seems to revolve around Elvis Presley-like stove-top jeans and shirts best described as Leave It To Beaver-era pyjama tops.
He also seems to have a truly odd penchant for 1950s flannel, his socks are, of course, always an adventure and he has never — and one truly needs to see him first thing in the AM to fully appreciate this last — met a barber he agreed with.
But that’s not what makes him one of a kind. What really sets young DJ Seams Legit — for that is the “street” name our young Andy Griffith has adopted — apart is his love of classic cars.
He absolutely worships old iron. He fawns over rusty old Fiats like they’re the second coming of Ferrari, thinks God himself invented British sports cars and talks about banged-up Nissans like most young men talk about … well, you know what most young men talk about.
Most importantly — at least for the topic of this particular Motor Mouth — he actually spends money on these eBay “treasures.”
Not surprisingly, they’re all hunks of junk. His current ride, a 1970 Corvette, is so horrifically deformed that even Mad Max wouldn’t be caught dead behind the wheel.
In the not quite four years he’s been with Driving, he’s also been in possession of a Lotus with no floor, a 1966 Corvair with pistons as hole-y as the Pope and some form of late 1960s Chrysler behemoth that was actually — the exception proving the rule because he couldn’t wait to get rid of the thing — kinda natty.
That he somehow manages to procure all these rat traps on a salary that wouldn’t challenge Tim Hortons — he chooses to live in squalor, saving his Loonies, he beams with a certain twisted pride, for his jalopies — speaks to a devotion we old-time gearheads can relate to.
And that’s what makes him an anomaly. Future generations, as we’re endlessly told, have no interest in cars, and though every stock analyst worthy of his (or her) bespoke Ermenegildo Zegnas has lamented how this might affect new car sales, few have turned their profit/loss statements to the classic car marketIt is, according to Automotive News’ Larry P. Vellequette, a market in significant decline.
The problem is one of simple supply and demand, says Vellequette. “Baby Boomers are still buying more classic cars than they are selling.
That’s a problem [because] Boomers in the U.S. outnumber my generation by about 10 million people, so there’s probably not enough of us to buy all those collectible cars the Boomers have covered in their garages.”
Millennials also won’t be the solution because a) they’re too busy with their cell phones and, as Vellequette notes, b) they’re broke.
That combination of demographics and debt “hardly paints a rosy outlook for a long-term expansion of collecting cars,” says Automotive News’ senior reporter.
Vellequette’s prognosis is backed up by all the leading market indicators.
Hagerty’s 1950s American Classic Index — yes, just like the stock market, collectible cars have become so inflated that each segment needs its own index — is now as flat as Tokyo’s Nikkei.
Ditto for Ferraris and affordable classics. Investment-grade British and German collectibles are actually down in comparison with their peaks when Boomers, burnt by their losses in real estate, started treating cars like stocks, pumping big money into cars they dreamed of in their youth.
That comparison with the high-end real estate is more than justified. Just like the housing market, many in the classic car industry are in denial. Indeed, echoing Vancouver and Toronto industry experts after local luxury taxes were imposed on housing, ClassicDriver.com, claims that — shades of every,
well, shady, real estate agent who’s ever sold a million-dollar condo in North Van — “the recent ‘cooling off’ period is positive in respect of the market’s long-term prosperity.”
But recent gains — again cue comparisons to Toronto and Vancouver’s hyper inflated housing prices — are simply unsustainable. According to Sportscardigest.com, for instance, a recently-sold 1968 Ferrari 330 GTC had an annual compounded return of 18.45 per cent per year; a Lamborghini Miura, an even more impressive, biopharm-like 21.5 per cent year-over-year appreciation. Even something as comparatively run-of-the-mill as a 1980s air-cooled Porsche has likely tripled in value over the last decade.
But, the bigger problem — the one nobody is discussing — is that yesteryear’s high-end classics must also now compete with today’s future collectibles for the hearts and wallets of our millionaires.
A 1969 Dino 246 and a 2018 488 GTB may share nothing mechanically, but they are both, at heart, impractical — admittedly, one more than the other — motorcars whose primary purpose is to flaunt the success of its owner.
With Sergio Marchionne threatening to almost double Ferrari production and other uber marques — Lamborghini, Bentley et al — planning the same, even the one-per-cent may soon face a glut of overpriced four-wheel trinkets vying for their attention. No wonder Kevin Tynan, senior automotive analyst at Bloomberg Intelligence, says “weakness in the collector-car market may foretell a more defensive stance from luxury and discretionary consumers.”
It’s enough to leave my friend — and yet another Driving writer — Jil McIntosh, scratching her head.
An avowed classic car nut, she and partner Fred own no less than four American retro-rods, their house and garage a tribute to classic car memorabilia that would challenge the Petersen’s.
Even though she has no plans to ever sell her prized ’47 Caddy — “I’ll be driving it to my own funeral” — she is concerned about the day she might choose to “downsize” her 1949 Studebaker or Fred’s 1966 Dart.
“You can’t have it both ways. You can’t brag that your rod is suddenly worth $75,000 and then bemoan the fact young people aren’t getting into cars.”
Simply put, there aren’t enough Claytons to go around. And they’re all broke.
One point to keep in mind is that in the USA, classic and exotic cars are treated as investments by the IRS, whereas in Canada, no such luck.
In fact, many of the high priced vehicles offered at US auctions are bought by a leasing company for the owners who turn around and lease the vehicle accordingly, thus being able to write-off the most of the lease.
In another article on another type of collection, an 11,000 piece model train collection, the largest collection in Canada, the collector was quoted as follows:
"it's a shame that more young people today don't share the same passion for collecting.
"Most of your collections now are going down in value because there's no demand for it," he said. "All us baby boomers, we got all these nice collections, but kids look at that like 'what do you want me to do with that?' They're not interested."
How true, my two sones are not interested in my die-cast collection.
Back to David Booth's article:
With Boomers paying big bucks to scoop all the cars, who's going to be able to buy what's left?
Driving’s videographer, our very own Clayton Seams, is, like so many in the creative arts, unique.
Admittedly talented and imaginative, his personal “style” seems to revolve around Elvis Presley-like stove-top jeans and shirts best described as Leave It To Beaver-era pyjama tops.
He also seems to have a truly odd penchant for 1950s flannel, his socks are, of course, always an adventure and he has never — and one truly needs to see him first thing in the AM to fully appreciate this last — met a barber he agreed with.
But that’s not what makes him one of a kind. What really sets young DJ Seams Legit — for that is the “street” name our young Andy Griffith has adopted — apart is his love of classic cars.
He absolutely worships old iron. He fawns over rusty old Fiats like they’re the second coming of Ferrari, thinks God himself invented British sports cars and talks about banged-up Nissans like most young men talk about … well, you know what most young men talk about.
Most importantly — at least for the topic of this particular Motor Mouth — he actually spends money on these eBay “treasures.”
Not surprisingly, they’re all hunks of junk. His current ride, a 1970 Corvette, is so horrifically deformed that even Mad Max wouldn’t be caught dead behind the wheel.
In the not quite four years he’s been with Driving, he’s also been in possession of a Lotus with no floor, a 1966 Corvair with pistons as hole-y as the Pope and some form of late 1960s Chrysler behemoth that was actually — the exception proving the rule because he couldn’t wait to get rid of the thing — kinda natty.
That he somehow manages to procure all these rat traps on a salary that wouldn’t challenge Tim Hortons — he chooses to live in squalor, saving his Loonies, he beams with a certain twisted pride, for his jalopies — speaks to a devotion we old-time gearheads can relate to.
And that’s what makes him an anomaly. Future generations, as we’re endlessly told, have no interest in cars, and though every stock analyst worthy of his (or her) bespoke Ermenegildo Zegnas has lamented how this might affect new car sales, few have turned their profit/loss statements to the classic car marketIt is, according to Automotive News’ Larry P. Vellequette, a market in significant decline.
The problem is one of simple supply and demand, says Vellequette. “Baby Boomers are still buying more classic cars than they are selling.
That’s a problem [because] Boomers in the U.S. outnumber my generation by about 10 million people, so there’s probably not enough of us to buy all those collectible cars the Boomers have covered in their garages.”
Millennials also won’t be the solution because a) they’re too busy with their cell phones and, as Vellequette notes, b) they’re broke.
That combination of demographics and debt “hardly paints a rosy outlook for a long-term expansion of collecting cars,” says Automotive News’ senior reporter.
Vellequette’s prognosis is backed up by all the leading market indicators.
Hagerty’s 1950s American Classic Index — yes, just like the stock market, collectible cars have become so inflated that each segment needs its own index — is now as flat as Tokyo’s Nikkei.
Ditto for Ferraris and affordable classics. Investment-grade British and German collectibles are actually down in comparison with their peaks when Boomers, burnt by their losses in real estate, started treating cars like stocks, pumping big money into cars they dreamed of in their youth.
That comparison with the high-end real estate is more than justified. Just like the housing market, many in the classic car industry are in denial. Indeed, echoing Vancouver and Toronto industry experts after local luxury taxes were imposed on housing, ClassicDriver.com, claims that — shades of every,
well, shady, real estate agent who’s ever sold a million-dollar condo in North Van — “the recent ‘cooling off’ period is positive in respect of the market’s long-term prosperity.”
But recent gains — again cue comparisons to Toronto and Vancouver’s hyper inflated housing prices — are simply unsustainable. According to Sportscardigest.com, for instance, a recently-sold 1968 Ferrari 330 GTC had an annual compounded return of 18.45 per cent per year; a Lamborghini Miura, an even more impressive, biopharm-like 21.5 per cent year-over-year appreciation. Even something as comparatively run-of-the-mill as a 1980s air-cooled Porsche has likely tripled in value over the last decade.
But, the bigger problem — the one nobody is discussing — is that yesteryear’s high-end classics must also now compete with today’s future collectibles for the hearts and wallets of our millionaires.
A 1969 Dino 246 and a 2018 488 GTB may share nothing mechanically, but they are both, at heart, impractical — admittedly, one more than the other — motorcars whose primary purpose is to flaunt the success of its owner.
With Sergio Marchionne threatening to almost double Ferrari production and other uber marques — Lamborghini, Bentley et al — planning the same, even the one-per-cent may soon face a glut of overpriced four-wheel trinkets vying for their attention. No wonder Kevin Tynan, senior automotive analyst at Bloomberg Intelligence, says “weakness in the collector-car market may foretell a more defensive stance from luxury and discretionary consumers.”
It’s enough to leave my friend — and yet another Driving writer — Jil McIntosh, scratching her head.
An avowed classic car nut, she and partner Fred own no less than four American retro-rods, their house and garage a tribute to classic car memorabilia that would challenge the Petersen’s.
Even though she has no plans to ever sell her prized ’47 Caddy — “I’ll be driving it to my own funeral” — she is concerned about the day she might choose to “downsize” her 1949 Studebaker or Fred’s 1966 Dart.
“You can’t have it both ways. You can’t brag that your rod is suddenly worth $75,000 and then bemoan the fact young people aren’t getting into cars.”
Simply put, there aren’t enough Claytons to go around. And they’re all broke.
Even now I have a hard time spending $800 or more on a custom wheel rims when it doesn't make the ride any more efficient (sprung weight and looks not factored)
