- During the COVID pandemic, prices of luxury goods, including classic cars, went through the roof.
- However, in the current geopolitical and economic landscape, things are much more uncertain.
- Thus, classics have returned to the price points they used to occupy before the pandemic craze.
Since 2020, the world seemed to have gone crazy, with the COVID pandemic resulting in many people having disposable income they were unable to actually spend, while most of us were working from home, it felt like we were under house arrest to keep the virus from spreading.
Where’s a will, there’s a way, though, and people found a way to splurge: online sales. Luxury items that make us feel good, are a childhood dream, or were simply viewed as investments, shot up in value as, in most cases, a multitude of buyers were vying for the same object.
Just ask anyone who has tried to obtain a Rolex (or any other luxury watch like AP or Patek): getting any model requires getting put on a waiting list that could stretch for years. Flippers had a field day, as buyers turned to the grey market and willingly paid three to ten times the MSRP of a stainless steel timepiece that was less accurate than their smartphone. Crazy, isn’t it?
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The classic car market was more of the same. Prices for prized classics went ballistic, as collectors were more than willing to pay a million (or five) more than they would have pre-2020 to get that rare, extremely desirable Ferrari to join their garages. And the choice of brand is no coincidence.
Industry expert and auction analyst Rick Carey highlighted to Hagerty the situation with one example: a 1959 Ferrari 250 GT LWB California Spider Competizione, one of only eight in the world with an aluminum body. This very car sold for $4.95 million at the Monterey 2007 auction by RM Sotheby’s.
After its new owner restored it, they made a very nice profit by selling it for $17,990,000 at the same house’s New York auction in 2017. True, that was also pre-pandemic, but extremely rare classic Ferraris almost always shoot up in value anyway. No matter how expensive that restoration was, making $12 million in a decade from a single car was one hell of an investment, wouldn’t you agree?
Here’s the thing, though: at Amelia this year, it changed hands for a “mere” $9,465,000, including buyer’s premium. This represents a shocking 47 percent drop in value, and was even less than the lowest initial estimate. We don’t doubt that what Broad Arrow Auctions, who handled the sale, describes as “arguably the most significant 250 GT California Spider in existence” would have fetched a much higher sum during the pandemic. Apparently, though, the owner held out and now prices have come back down to Earth – or at least the part of it people who can spend $10 million on a classic Prancing Horse live in.
“This is a lovely car with a significant racing history, impeccable provenance and no stories. It’s worth top dollar, but in 2025 ‘top dollar’ apparently means 60 percent of what it meant in 2017,” Carey explains.
One might consider this particular Ferrari a one-off, but it’s not. Hagerty‘s current Market Rating of 60.39 is the lowest since November 2020, when the classic car market’s pandemic boom started. “It’s fair to say that the market has returned to a pre-pandemic normal”, it writes. And while rare Ferraris still go for millions, even lower-priced cars are affected.
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Hagerty notes that “vehicles trading hands privately are doing so at lower and lower prices”. This is proven by the fact that the percentage of cars selling above their insured value has dropped to 38.9 percent, its lowest point in over three years. At its peak in summer 2022, more than half of private sales were selling above insured value. Today, for cars valued under $250K, the ratio of Insured Value Increases to Decreases has dropped to its lowest point since December 2021.
The explanation is simple. First, people are not inclined to pay the past three years’ absurd prices. Second, with an “unsteady” global market, prices are unlikely to skyrocket any time soon, and US President Donald Trump essentially declaring an economic war against everyone and everything that’s not American isn’t going to make things better for the foreseeable future.
