Monterey Car Week Auction Sees 3% Dip as Preference Shifts to Newer Models

In a noticeable shift from previous years,39 auction sales during the 2023 Monterey Car Week experienced a 3% decline compared to the previous year. This change can be attributed to a transition from older to newer vehicles, resulting in a backlog of unsold classic cars from the 1950s and 1960s. The total sales at this year's five car auctioneers in Monterey, namely, RM Sotheby's, Broad Arrow, Gooding & Company, Mecum, and Bonhams, amounted to $391.6 million, down from $403 million in 2023, according to Hagerty, the classic-car insurance company. 

Decline in Total Sales and Shift in Collector Preferences

The decline in total sales has been consistent, following a 14% drop last year when compared to the peak of 2022. Out of the 1,143 cars available for sale this year, only 821 found buyers, resulting in a 72% sell-through rate, as reported by Hagerty. Additionally, the average sale price decreased slightly to $476,965 from last year's average of $477,866. Despite the decrease in sales, experts believe that wealthy collectors still possess ample funds and are experiencing confidence due to the recent upturn in the stock market. However, a notable shift in the types of cars being sought after by collectors has been observed. A significant factor contributing to the decline in sales is the oversaturation of similar cars across multiple auctions, leading to a lack of strong prices and sales, according to Simon Kidston, founder of Kidston and a prominent advisor to affluent car collectors.

Changing Preferences and Emerging Trends

Kidston noted the overwhelming presence of similar vehicles at the auctions, raising questions about the consideration of the available inventory and the potential overlap in targeted buyers. Adding to this challenge, many of the cars had reportedly been displayed in dealerships for extended periods, giving the impression of being “sloppy seconds.”

The auction statistics revealed a dismal sell-through rate of 52% for pre-1981 cars priced at $1 million or more. In contrast, for vehicles less than 4 years old, the sell-through rate was a more promising 73%, suggesting a shift in the collector demographic. The emergence of a new generation of collectors, predominantly Gen Xers and millennials, has been driving the market, with a preference for cars from the 1980s, 1990s, and 2000s.

Impact on Classic Car Values

The changing dynamics in the classic car market, particularly as older collectors start selling or downsizing their collections, are expected to impact the prices of older cars for the foreseeable future. According to mckeel Hagerty, CEO of Hagerty, the market is experiencing a transition from the popularity of classic cars from the 1950s and 1960s, such as Enzo-era Ferraris and full classics, to the ascendant modern supercar class. This diverging trend between older and newer cars has become more pronounced as the market undergoes a shift in preferences.

Furthermore, external factors such as rising interest rates are also exerting pressure on the classic car market. Many buyers, particularly at the lower end of the market, had been utilizing financing to acquire cars and expand their collections. At the high end, the increased interest rates have elevated the opportunity cost of purchasing a classic car, leading potential buyers to reconsider their investments. The top ten most expensive cars sold during the 2023 Monterey Car Week are as follows: 

• 1960 Ferrari 250 GT SWB California Spider: $17,055,000 (RM Sotheby’s) 
• 1938 Alfa Romeo 8C 2900B Lungo Spider: $14,030,000 (Gooding & Company) 
• 1955 Ferrari 410 Sport Spider: $12,985,000 (RM Sotheby’s) 
• 1969 Ford GT40 Lightweight: $7,865,000 (Mecum) 
• 1997 Porsche 911 GT1 Rennversion Coupe: $7,045,000 (Broad Arrow Auctions) 
• 1959 Ferrari 250 GT LWB California Spider: $5,615,000 (RM Sotheby’s) 
• 1995 Ferrari F50 Coupe: $5,505,000 (RM Sotheby’s) 
• 1955 Ferrari 857 S Spider: $5,350,000 (Gooding & Company) 
• 1967 Ferrari 275 GTB/4 Alloy Coupe:$5,285,000 (RM Sotheby’s) 
• 1958 Ferrari 250 GT TdF Coupe: $5,200,000 (Gooding & Company)