History of.. Price of Collectable Cars Over Time – Enthusiast Motor Insurance

December 13th, 2022

Looking at the billions, perhaps trillions, spent over the years on collectible motor vehicles you could be forgiven for thinking it had always been that way.

In reality, the surging growth and resultant downturns that characterise the specialist vehicle market are quite recent phenomenons, originating in the late 1970s.

A decade before that time it was still possible, via Road & Track in the USA or Racing Car News in Australia, to find spectacular classic and competition cars being sold for a fraction of their new cost. Nothing so old as last year’s race car, as the saying goes.

High-end vintage models, representing brands like Hispano-Suiza, Pierce Arrow, Rolls-Royce and even Bugatti could be bought for the price of a family sedan, while Model T Fords, early Chevrolets and Austins were acquired unrestored in exchange for the proverbial ‘slab of beer’.

As the 1980s dawned, world markets began to change and prices for significant cars were rising, although not at any great pace. This movement was driven in part by the popularity of Historic motor sport, but also by nervousness at increasing political animosity towards older cars.

In various countries, but primarily the United States, there had for some years been programmes intended to eliminate 1960s-70s ‘gas guzzlers’ from the automotive population. These movements also contributed to the scrapping of some older and quite significant models that were still in restorable condition.

To save them, repair shops throughout the USA, Europe and even parts of Australia with reputations for quality work were being entrusted with ‘projects’ that would have been well beyond the skills of home restorers.

What emerged were spectacular cars in significantly better condition than when they were new that competed for trophies on the lawns at Pebble Beach in California or Beaulieu in Britain and form the centrepiece of high-end collections.

At the same time, cars that hadn’t been on the open market in decades were being consigned to hastily arranged ‘Collector Car’ auction sales; cars that despite their scarcity, would often fail to find buyers.

In 1981 at a Christie’s sale in London, a 1963 AC Cobra 289 described as being ‘excellent, unrestored’ failed to sell a high bid of £13,000. In 1988, also at Christie’s, a similar car did sell, with a hammer price of £90,000.

Lower down the value scale but still popular with British buyers and destined for further greatness were the Aston-Martin DB series and Jaguar E Type. Both used straight six-cylinder engines of around four litres, with sleek bodywork and classically British leather trim.

The Aston started life a little more expensively than the E Type and would widen its lead as the aura of on-screen James Bond stardom took hold.

During 1981, a very good DB5 made £9000 at a UK auction, with a comparable car sold at around the same time in Australia for $18,500. Putting that figure into perspective, an XE Ford Fairmont V8 sold new in 1982 at $235 more than the Aston.

Economic events would play a major role as well; contributing to the rapid growth of older vehicle values during the 1980s and their equally swift decline a few years later.

October 1987 brought the most devastating one-day downturn ever in stock market values occurred, affecting stock exchanges across the world. The US-based Dow Jones Index on that day – now known as Black Monday – declined by a catastrophic 22 percent and continued to drift downwards.

Those who had anticipated the crash and pulled money out of shares were now holding significant amounts of cash and looking for less-volatile investments. Collector cars were seen as tenable, even if the market was largely uncharted territory.

US buyers would typically target established classics from the 1920s-30s, with brands like Duesenberg, Cadillac and Pierce Arrow seen as safe prospects. Outside the USA the preference was for prominent European and British models including D Type Jaguars, the Lamborghini Miura and Ford GT40 Le Mans cars.  

In Australia, where we had seen less exposure to Black Monday, investors were still influenced by US activity and interest in cars as investments grew as well.

However, local buyers were also cautious with their cash, so outlays were generally lower and collections smaller. Most would involve 1-5 vehicles, with popular choices being local performance cars, E Type Jaguars and 1950s North American cruisers.

Ferrari on a worldwide scale was popular too and became more attractive to collectors following the August 1988 death of founder Enzo Ferrari. Enzo’s death was accompanied by rumours that the brand would fold and increased demand for high profile models including the recently launched twin-turbo F40 coupe.

F40 prices soared past $1 million, as did the money on offer for competition models like the 250TR and 250 GTO coupe. Prices for one of these peaked at US$13 million during 1990 before collapsing to be worth less than $3.5 million by 1995. Today, similar cars sell for over US$50 million.

Some speculators took drastic measures in the face of huge impending losses, including a member of the British aristocracy who ordered staff to cut up and bury three very significant Ferraris in the hope of claiming on the insurance. He went to prison instead.

By the mid-1990s the market had returned to relative calm and people wanting to own significant vehicles for enjoyment rather than financial gain were again able to do so.

Ferrari 246GT Dinos that had topped $200,000 on the Australian market declined by 40 percent in the space of 18 months. So did GTHO Phase 3 Falcons, which had reached $80-90,000 during 1989 and were regarded as the Holy Grail of local performance cars.

As economic conditions improved and real estate prices firmed during the early 21st Century, the market for Australian ‘muscle’ cars was climbing and keeping values comfortably ahead of inflation. Benchmark GTHOs and A9X Torana Hatchbacks could be bought during 2004-05 for $145,000 and $55,000 respectively before starting to make rapid and inexplicable gains.

First came reports from a National gathering of Falcon GT Club members, where ‘bags of cash’ were being offered for category-winning cars. The movement then began to involve other models and brands, driven apparently by an atmosphere of prosperity, high real estate values and low interest rates.

Ego found its way into the mix as well, as evidenced by the new owner of a scarce Holden who phoned a magazine editor to boast he had just paid a new record price for road-going versions of this particular model.

Some time later it would be resold at a significant loss, as was a 7.0-litre Holden Monaro, one of two in existence, that made $920,000 against trend at auction in 2008 but by 2012 had plummeted to $650,000

At their peak in 2007, GTHO Phase 3 prices at auction hit a record level of $683,000 and there were reports of one exemplary car changing hands privately at $900,000.

By 2009, with the GFC was at its height, many of the cars bought 18 months earlier for high prices had plunged by to pre-2006 levels and speculators were once again out of the game.

A minor revival occurred during 2014-16 but it stalled too and values for mainstream collector models would remain steady until 2019.

What happened next defied all logic or informed prediction. It will also bring consequences that won’t become fully apparent for some years to come.

Again, a combination of factors was involved, beginning with the shutdown of Australia’s automotive industry and accelerated demand for Holden and Ford Falcon models of all types and ages.

Auctions saw near-new examples of limited production HSV and FPV models sold for up to 10 times their listed prices. Matching those bids was the money available for older cars with competition history, including the $2 million paid for one of four GTHO Phase 4 Falcons built in 1972 but never raced

Then came the world’s first pandemic in 100 years and global consequences more dire than any recent event since World War 2 and the Great Depression. More than 6.5 million people are thought to have died due to Covid-19 and economic activity across the world was curtailed or collapsed.

In Australia, despite many of us being under virtual house arrest, life managed to maintain a relatively normal pace while personal and corporate wealth expanded.

Interest rates reached virtually zero and real estate activity soared. Money in the bank was earning nothing so other avenues of investment were sought.

As had happened under similar circumstances in the late 1980s, demand for quality motor vehicles accelerated and prices climbed past the peaks previously recorded in 2005-07.

This time, though, it wasn’t just locally made performance cars that were doubling in price. Diverse models including 105-Series Alfa Romeos, the Mini Cooper S, Ford Mustang GT Fastbacks (as featured in the cinema classic Bullitt) and mid-enginedFerrarisrewarded owners with serious value gains, yet others of the same brand hardly appreciated at all. .

If you owned a Rolls-Royce, most kinds of Jaguar (except the mercurial E Type), post-1980s Mercedes-Benz, MG and later Porsches then the pickings would have been slim indeed.

Diminishing real estate values, rising interest rates and climbing international oil prices have traditionally been factors that dampened demand for ‘collector’ cars. Yet during 2022 and despite the brakes being tapped a few times there is no indication of any widespread decline in demand for quality classics. Certainly nothing to mirror the downturns of 1990-92 and 2007-09.

Genuinely unsustainable prices, such as the $1 million and above allegedly paid for some local performance cars with dubious backgrounds, are gone. So too the market’s brief flirtation with rusty and grubby ‘barn finds’. However, where a car is of high quality with verified history it will still generate strong results in retail and auction sales.

How long the market sustains these levels remains in the lap of the economy, but 40 years of history confirms that high-quality, specialist vehicles maintain their appeal and deliver sustained returns. They are also an enjoyable place for owners to park their spare money.

Whether you have just one Special Interest vehicle or a hundred, Enthusiast Insurance rewards owners who use their cars infrequently and house them securely. Cover through Enthusiast is available online and 24 hours per day, every day, so to compare Enthusiast’s rates and coverage, log into www.enthusiast.com.au and select Quick Quote.