As Summer Heats Up, Collector Car Market Slows Down
Understanding the Hagerty Market Rating
The Hagerty Market Rating is a comprehensive measure that evaluates the current state of the collector car market. It considers factors such as market activity, directional momentum, and underlying strength, presenting these insights in a numerical range from 0 to 100. This rating functions similarly to stock market indices like the DJIA or NASDAQ Composite, offering a dynamic snapshot of market conditions.
This month, the Hagerty Market Rating experienced a slight decline, dropping by 0.04 points to reach 59.77. This marks the first time in over 14 years that the rating has remained below 60 for two consecutive months. Prior to 2012, scores below 60 were more common, but the current value of 59.77 represents the lowest it has been since late 2020.
The Hagerty Market Index Trends
In addition to the Market Rating, the Hagerty Market Index—a stock market-style version of the rating—has seen a consistent downward trend. For six months in a row, the index has declined, reaching its lowest point in three-and-a-half years. Currently at 173.46, this value remains relatively high compared to any period before 2015. However, the index has fallen by 16% since its peak in late 2022, with 29 out of the last 31 months showing declines.
Private Market Performance
Despite the overall market downturn, the private sector showed some positive signs. Cars sold outside of auctions commanded higher prices, with the real-dollar average sale price hitting its highest level in three-and-a-half years. When adjusted for inflation, the average sale price still exceeds any point in the past two years. However, the ratio of cars selling above their insured value has steadily decreased, now standing at 37.3%, the lowest since early 2022.
Public Auctions and Market Dynamics
In contrast, public auction markets continue to see an increase in the number of cars sold, though median prices have fallen. The current median sale price of $27,038 is the lowest recorded since the start of the COVID-19 pandemic in May 2020. Adjusted for inflation, this is the lowest since the metric was introduced in 2011. Auction companies are listing more low-value cars to maintain volume, but there is hope that high-dollar auctions in California next month might reverse this trend.
Industry Expert Outlook
Industry experts remain cautious about the market's future. Their outlook, measured on a 0-100 scale, has consistently hovered between 49 and 51 for the past nine months. They are closely watching how the decline in the U.S. dollar against other currencies might affect prices during the Monterey auctions. With many European cars expected to participate, a weak dollar could hinder their ability to achieve record sales. Additionally, the broader economic uncertainty adds to the challenges faced by collectors.
New Edition of the Hagerty Price Guide
At the beginning of the month, a new edition of the Hagerty Price Guide was released, reflecting changes in the value of 40,000 vehicles. This update marked the first increase in six months and the second-largest increase in over two years. The Hagerty Hundred, which tracks the #2 condition value of the 100 most commonly insured vehicles, was a positive highlight. However, overall values have decreased, with both the Average and Median condition #3 (good) values either dropping or failing to keep pace with inflation. The Blue Chip Index, representing the average #2 condition value of 25 seven-figure cars, saw its largest drop in nine months. This segment will be tested at the upcoming Monterey auctions, with results expected to influence the market rating in September.