The death of fair deals on older desirable cars

"Tapas" (tapas) 09/25/2018 at 14:03 • Filed to: None

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Is it just me, or does any site that focuses on selling or finding ads for quirky, old or enthusiast favorite cars ends up growing into a site where you can no longer find these cars for a fair price?

If anything, the sites end up contributing to increasing the market price of said cars and inflating bubbles, l ike we have with older Porsches and BMWs now .

Case in point: Bring a Trailer, Barn F inds, Classic Car Virus and so on....

Sure, as these cars get older, they may appreciate in value. And there’s no way of knowing how much they would have appreciated if sites like BaT did not exist, or weren’t popular.

What I am wondering is how, if at all, can this be remedied? Is there a way we can see to it that people don’t start paying $30k for clean Roadmasters next?

jasmits > Tapas 09/25/2018 at 14:17

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You forgot to adjust your sights. The cars that were quirky, old enthusiast favorites 10 years ago are now well on their way back up the appreciation curve.

E30s too expensive? That’s a vintage BMW now. If you just want an old BMW you should check out how much E46 $5k buys you these days.

farscythe - makin da cawfee! > Tapas 09/25/2018 at 14:17

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sure.... tank the economy and eat the rich

lone_liberal > Tapas 09/25/2018 at 14:19

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I know with BaT and Barn Finds they went from sites that pointed to interesting cars for sale other places to hosting their own sales so they benefit from higher sale prices. In the end, though, the cars are only worth what somebody will pay for them so the only way the prices come down is if people stop paying the, subjectively, stupid prices that people are asking. 

davesaddiction @ opposite-lock.com > Tapas 09/25/2018 at 14:20

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“fair price” - if 2 individuals are willing to buy a certain thing at a certain cost, then it’s a fair price, even if it may seem ridiculous. These are not commodities, they are unique, sometimes rare, old machines. Things are only worth what someone will pay.

If you were a seller, I’m sure you’d want everyone in the world who was interested in what you had for sale aware of your sale, and within easy bidding “reach”.

Tapas > jasmits 09/25/2018 at 14:22

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I see your point.

But I don’t remember anything outside of high profile auctions where classic cars were auctioned for that much....and ebay has been around for a long time.

M ore examples of these cars are seeing very high prices very frequently .

I feel that s omething seems to be magnifying the prices that I feel is outside natural appreciation, and I can’t quite put my finger on it.

All of this is of course just my perception.

E90M3 > Tapas 09/25/2018 at 14:25

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I feel like we all get a certain era stuck in our heads when it comes to relative age of a car and value. For me that’s probably 2005-2010 when I was first becoming a car person. I remember when the E90 first came out and E30 M3s were still less than 15k. I don’t think of the E90 as an old car, yet I see some in junkyards now. The E90 has been out of production for 7 years now. I think it’s all about perspective and how our perception meets up with reality .

random001 > farscythe - makin da cawfee! 09/25/2018 at 14:26

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Eric @ opposite-lock.com > Tapas 09/25/2018 at 14:29

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What you’re seeing is more than just market forces, you’re also seeing the radical increasing disparity between rich and poor, along with inflation that has been understated for decades.

The things I’ve realized recently boggle my mind. I feel like a loser for missing out on the party that has been going on in a number of industries. The good stuff will be sniped and draw up values on lesser stuff when you have a 5-1% class with ready access to these sites and incomes that keep up with inflation...

jasmits > Tapas 09/25/2018 at 14:32

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Those are classic cars now. The kid who desperately wanted an XJ when he was 16 in 1998 but couldn’t because his parents gave him a hand-me-down Camry is now a 36 year old doctor who doesn’t mind paying an extra 10k if he can have one exactly like his parents shook their heads no to in that car lot 20 years ago.

edit: also that 36 year old grew up on the internet and is more comfortable buying his dream car online than someone would’ve been even 10 years ago. 

f86sabre > Tapas 09/25/2018 at 14:36

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The sites mentioned are pushing prices up by exposing these cars to a more casual market. The fact that BAT is hosting auctions has to speak to where the money is.

In the internet world it isn’t realistic to assume that these nitches of interest would remain hidden. There is a flip side was well. I wanted a classic Mini. Looking at Craiglist (modern want ads) and other typical sources showed a market price from $12k-$15k for a sound car in the US  with a good engine and no major body defects. I was able to order one from Japan at a fraction of that thanks to the internet. I used our own Flavien, but I could basically order a car direct now a days. So, you win some and you loose some.

Tapas > f86sabre 09/25/2018 at 14:45

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Yes, that makes sense.

The niches online have enough of a following, scattered across the world or not, to be mainstream on its own.

Tapas > jasmits 09/25/2018 at 14:48

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I get that. It just feels like this is an artificial bubble for BMW and Porsche.

N ot all kids who dro o led over cars as kids are doctors as adults today . And I have a bone to pick with them doctors!

Sure, they’re literally keeping us alive, but only to metaphorically kill us in the classic car market place lol.

Tapas > E90M3 09/25/2018 at 14:49

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I admit, that era in my head is  partially what’s causing me to scoff at the prices today.

syaieya > Tapas 09/25/2018 at 14:51

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If anything the sites have brought cars into a middle ground that used to only vaguuely exist. Sure, we highlight the stupid expensive ones and yes with publicity the speculators will come to town. But in the long run there are so few vehicles that would be smart as an “investment” and it makes it so much easier to find out about cars that would of otherwise passed in the night. 

The best bet is as it always had been, buy the best one you can as so on as you can. Hope for the old guard that sells things where the new blood doesnt look. 

Tapas > davesaddiction @ opposite-lock.com 09/25/2018 at 14:53

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I get that. Maybe I was unable to articulate what I meant, but I’ll give it another shot.

I feel like the appreciation bubble of the classic cars is because of something new that wasn’t a factor maybe 10 years ago. I can’t say what it is definitively and suspect it is the specialist sites that are moving toward an auction model, as opposed to a sale at seller’s price model.

Had I been a douchy multimillionaire today who was previously unable to afford an E30 M3, I could snipe every single one off the market at dick-swingly high buy prices fairly easily.

Tapas > lone_liberal 09/25/2018 at 14:55

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In that case , I/we unfortunately seem to share tastes with incredibly wealthy people.

E90M3 > Tapas 09/25/2018 at 14:57

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I think we’re all guilty of that. It’s one reason why I got my E90 over something like a 1M or an E30. I knew that it was the only time I would have a chance to buy an affordable one-owner low mileage E90 M3. Cars like that might be out there, but in minuscule numbers, so people will pay a premium. Same thing with older cars. 

davesaddiction @ opposite-lock.com > Tapas 09/25/2018 at 15:02

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I mean, if someone’s never seen a thing, they may not know that they want it, so these sites that aggregate things and get them in front of more eyeballs means that there’s collectively more WANT than there wa s compared to an ad in a newspaper, magazine or a site like Autotrader in the olden days . The more people who want a thing, the higher the price will go.

And yeah, there’s a lot more rich people willing to part with their cash these days than there were 10 years ago. Wait for the next recession - the prices will likely go down with the market.

Future next gen S2000 owner > Tapas 09/25/2018 at 15:04

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Expand your market, bring more customers in, limited supply, and voila. Makes it possible to buy that one car you want that only exists outside your local area.

Lots of enth usiasts all wanting the same things.

jasmits > Tapas 09/25/2018 at 15:09

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It’s no different from the muscle car bubble that’s now in the process of bursting really, except 80s BMWs and Porsche’s weren’t piles of garbage coming out of the factory. It’s an unfortunate fact of car enthusiasim that the cars we lust after as kids will be tantalizing cheap when we’re teens and young adults and then jump out of reach when we can afford them because everyone of the same generation is starting to make real money. Also it’s just natural that online auction prices jump as people get more comfortable spending online. I could never see myself at a Barret Jackson auction but if I were loaded I could totally see myself making a snap BAT buy.

This whole conversation stings extra for me right now, dad wouldn’t let me buy a lovely E30 when I was 17 because it didn’t have airbags. The EXACT car I was ready to spend $4k on 6 years ago  sold on BAT a few months ago for $12k...weeks after I sold the E36 I bought instead for a good chunk less than I paid. Dammit dad grumble grumble grumble....

WiscoProud > Tapas 09/25/2018 at 15:29

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We just need a good recession to restart the valuations. Following the 2008 recession, you could find lots of great cars for an affordable price (providing you still had a job).

We’re going on 120 months of bull market which is a record I believe, and the people at the top are very cash flush. If a major market correction happens (it will eventually), then the big spending ways of most people will stop, dropping the prices of all but the most desirable cars. 

WiscoProud > Tapas 09/25/2018 at 15:32

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I feel you on Porsche. There was an early year 964 Carrera 4 next to me in traffic last night, and i was reminded just how much i love those cars, even in near base trim. So I go pull them up online, and the cheapest I see are $35k. For that much money, I’m getting a nice 997 Carrera S. 

WilliamsSW > Tapas 09/25/2018 at 15:41

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These things ebb and flow a bit. I do think that we are seeing a bubble with some cars (Mopar muscle cars, 993 Porsches, Ferraris, and numerous others), but in your post, you use the terms “desirable” and “enthusiast favorite” cars. By definition, those cars are going to be worth some money.

By and large, the runups have been in cars that boomers lust after. Those people are retiring and have lots of money, by virtue of being old and rising income inequality. So there’s plenty of money chasing after a small number of cars.

Sites like BaT are just making information more readily available - and a lot of what you see that looks crazy are some of the most pristine examples bringing big $, but you can often find less than perfect examples for a lot less money.

I think what’s starting to happen now with E39 M5's (the one more recent car that I follow on BaT) is that values have peaked - EXCEPT for pristine low mileage cars. Here’s a graph of BaT’s E39 M5 sales - it’s pretty hard to see a trend there (if I had the hard data maybe I’d see a trend upward at the top) :

As an older Gen Xer (b. 1968) , it’s really hard for younger people to comprehend how BIG the Baby Boomer crowd is. But being at the front end of Gen X, I spent my ENTIRE school career watching schools close around me, because they went from being full to 50% empty. When that group starts to exit the market, these bubbles will pop - it’s happened before, and it will happen again. But the best of these cars will always command a decent buck.

tl;dr - I don’t really blame the auction sites for this, but the auction sites are the reason people get the *perception* that these cars are out of line - because that’s where the best examples often end up.

AuthiCooper1300 > Tapas 09/25/2018 at 15:54

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This is an extremely complex (and interesting) subject. I don’t have the time to go into detail now, but I would like to point out that an important part of the reason why we are all so obsessed with “old, desirable cars” is that modern cars are boring almost to the point of disappointment.

There is a clear demand for excitement that the current offerings cannot deliver. And that’s why so many people are obsessing about old cars.

As long as the market offers appliance-type cars there will be a big bunch of people looking elsewhere to get their kicks, pushing up the prices of – more interesting – older machinery.

There is also a lot to be said about how recessions do not really affect Ferraris or Porsches, or how the Internet has killed a cottage industry of old junk sleuths who used to pay fair money for what they found and also used to sell it at affordable prices. O r h o w “ c l a s s i c s ” a r e n o w fashionable and that means rich individuals buy ol d e r c a r s a l m o st on a w h i m . . . u n t il it s p irals out of control and you reach the dreaded “ 6 , 0 00 bucks for a n owne r ’ s manu a l ” level..

Tapas > davesaddiction @ opposite-lock.com 09/25/2018 at 16:27

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Uff I don’t know if I want another recession just yet. I’d be down only m aybe if it affected just the rich people lol

Tapas > AuthiCooper1300 09/25/2018 at 16:30

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Yeah....I hadn’t considered a lot of the factors you just mentioned.

That $6000 manual was really brought a tear to my eye. God forbid, I work enough to buy a classic Porsche and 10 years later, I have to take out a mortgage to find an original engine if I blow the 30 yo one that came with the car .

Tapas > WilliamsSW 09/25/2018 at 16:32

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My complain was geared towards Porsche and BMW, because I was seeing a bubble. But I see how Boomers play a role here.

Thanks for the insight and incredibly relevant data, since I have an E39.

davesaddiction @ opposite-lock.com > Tapas 09/25/2018 at 16:34

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Would be nice if it’d stick around a while longer...

Tapas > WiscoProud 09/25/2018 at 16:35

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Dear upcoming recession,

Pls hit only rich people next.

We’ve had our turn.

Warm regards,

Tapas

Tapas > jasmits 09/25/2018 at 16:38

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I feel you.

I commented in response to someone on this post earlier, dreaming about being a douchy millionaire who couldn’t afford E30 M3s as a younger person and sniping up every one of those at dick-swingingly high buy prices because sites like BaT gather everything from the internets and make it so easy.

AuthiCooper1300 > Tapas 09/25/2018 at 16:43

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Prices ride the wave of hype, and t h e p h e n o m e non of hype has never been so powerful as it is now.

The Internet, of course, is the perfect vehicle for hype.

Tapas > E90M3 09/25/2018 at 16:43

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Yeah. And it works both ways.

I feel incredibly lucky to have stumbled upon an amazing E39 M5. Had they not been so coveted, buying a good one used would be a breeze, not a matter of luck. And I wouldn’t have paid so much today.

But even if they weren’t so sought after, I’d still want one. And I wouldn’t factor in whether or not I’d made money on selling it, because I’m buying it to use it. I put 5000km on it in 3 months.

Removing this craze wouldn’t really change what people want. The craze  just adds barriers for people without means.

Tapas > syaieya 09/25/2018 at 16:47

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Yeah, speculators do mess up the market for BMWs and Porsches.

But even though there aren’t a lot of those people who are looking at these cars at investments, the domino effect they have is not insignificant.

Once every month or two, a pristine example will sell for $5 k more, prices for cars in less than perfect conditions will rise slightly. And along with natural appreciation, these new benchmarks will keep pushing the prices up.

Tapas > AuthiCooper1300 09/25/2018 at 16:51

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Yes.

Thank god the hype isn’t as widespread as it could have been. Here’s hoping that Lil’ Xan doesn’t buy an E30 Alpina .

WilliamsSW > Tapas 09/25/2018 at 16:59

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Yeah, BaT has seemingly turned into a Porsche/BMW auction site, with a secondary focus on Alfa GTVs.  I love those cars, but would prefer to see more variety, tbh.

I thought yours was an E39 - recent purchase, too IIRC? That’s the one car that I follow fairly consistently on BaT - I really like muscle cars, but those aren’t that common there.

BTW - I copy/pasted that graph directly from BaT.  Just go to ‘Search’ in the upper right corner of your screen (NOT the auction search) and type “e39 m5" and hit enter.  You’ll bring up that chart and links to every single car they’ve auctioned or written up.  Enjoy!

AuthiCooper1300 > Tapas 09/25/2018 at 17:02

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J u s t g i v e i t s o m e t i m e.

E90M3 > Tapas 09/25/2018 at 18:46

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Catch-22.

RiceRocketeer Extraordinaire > Tapas 09/25/2018 at 20:02

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I only click on the truly weird or unusual stuff there . I used to lust after an E46 M3 or NSX but they now look more like big piles of money than cars .

Tapas > WilliamsSW 09/25/2018 at 22:34

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Yeah, I got mine 3 months ago. Thanks for the tip