An interesting article

[Bob Johnson]

nearly all of the cars I sell are being purchased without financing. i don't try to hustle creative financing just to get a boge in a car. You're going to have some guys that have to sell if the stock market tanks or interest rates rise. A few times when the stock market tanked in the past, it actually encouraged some people to get a collector car, because they were afraid of the market. I don't think the market is going to hurt it, but interest rates might. It will cost some people more that have to finance, and some people with lots of money will put more of their money in interest bearing items since it's a no brainer when it reaches a certain level..

[Steve Chryssos]

Other than clones, I don't see where the author mentions customs. Doing so would further weaken his argument since customs are considered art as much as they are transportation.

[BonzoHansen]

What are you going do with an LS6 Chevelle? Does this nitwit really think people are driving those old Ferraris, let alone drive them hard? You can’t have fun with a hemi-powered Challenger? Does this guy remember how the ‘exotic’ car market died a decade or so ago?? Right or wrong, he comes off as rather pompous. I think he is right, but his thought process is wrong. To me, he is doing the equivalent of picking a football winner based on uniform color.

If he is just talking about high end cars, I don’t think he is wrong about price correction or dropping or whatever, and because prices are so high, it will be more noticeable in raw $$. I think he wrong on the ‘why’ part, because his perspective is wrong – I think his basic assumption on why guys buy big $$ cars is wrong. Based on his occupation and ‘knowledge’ of cars, he believes that high end cars are bought because they are desirable driving machines. His reality skews his premise.

I see two basic market segments for cars (drivers, not projects, etc), below $50k, and above $50k (I’m sure the breakpoint is arguable). IMO, high $$ cars are more often than not bought 1) as investments and/or 2) for bragging rights. The guys buying big $$$ cars are a small, rare breed with whom I do not share a frame of reference. But I have no issue assuming that 80% of these cars are not bought because they are desirable driving machines.

However, IMO, the ‘lower level’ car prices will likely drop a little or remain steady due to our friend Supply & Demand. The later group I dub the “Average American Joe”. And I think there are a lot of AAJs out there with money, memories & dreams. And IMO, Joe doesn’t want a Ferrari. I consider myself an AAJ, and I for one never wanted a Ferrari. I always saw them as temperamental, hard to fix prima donnas; driven by people you could describe in similar fashion. I want a car I can drive hard and put away wet and then repeat the process tomorrow. Hard working cars for hard working people. Maybe it is an American work ethic thing or something.

We just had a similar conversation at NastyZ28 on this topic. Here are my thoughts I posted maybe a month ago.

I think there are a few primary factors that might have some varying impact on muscle car prices.

*The stock market is up

The stock market has been doing well over the past month or so (now many months). When the market goes up, the prices of alternative investments (art, cars, etc.) goes down. Conversely, when the market is down/flat, like it was for a while, alternative investments gain steam. This of course applies more directly to higher dollar cars guys are buying as investments or with $$ they might have otherwise put into their brokerage accounts. But the high dollar cars have a ripple effect on all muscle car process, IMO. All you need to see about this theory is the exotic car market that boomed in the 80s then died and never really came all the way back. I do not anticipate a market drop for muscle cars anywhere near what happened to the exotic cars. More of a 'correction', like the housing market, IMO.

*Short term rates are up

The cost of borrowing has risen. As have the benefits of saving (although studies show American can’t even spell save, let alone do it)

*Housing market decline.

Now they can’t play with equity as much. Higher rates compounds this.

*Energy prices are up (although down from last fall – I mean from say 4 years ago)

Probably not a big deal, but there could be some impact. It could add to the decision process more than being a decision point.

*The fad of owning old muscle may be losing steam (with guys not like us).

These boomers buying these cars are all nostalgic for their high school cars or whatever, but then learn that time made their memories sweeter. The find out in reality that a 67 Chevelle doesn’t stop or turn well, and has no seat belts or air bags, they have no AC, and not all mechanics want to work on them. And their wife won’t ride in it (that could be good or bad, I suppose ). So at these higher prices, a new Vette is a better alternative.

*Supply of cars is increasing.

Yes, I know they don’t make them anymore. All this inflation in car prices has brought many cars out of the fields, barns & garages. There are more cars in circulation now, both restored and un-restored. Look at that show ‘The Last String Ray’ that was just on Speed. The guy basically said 10 years ago he probably would not have bothered with the car. But now it is a good time economically to take on a major project. The number of 67 String Rays just went up by one, due to the inflated market prices.


Supply up, demand down: prices go down. JMO.

[Beegs]

Supply/Demand-- always has been always will be.

Google this: "tulip bulb craze"

It will open your eyes.

[Beegs]

Here is one of the many links:

http://www.prestigeadvisors.com/The_...Bulb_Mania.htm

[BonzoHansen]

Supply/Demand-- always has been always will be.

Google this: "tulip bulb craze"

It will open your eyes.

Ah, an economics class classic! 'Bubbles' happen, the trick is to figure out why & guess when it will end!

[Beegs]

Ah, an economics class classic! 'Bubbles' happen, the trick is to figure out why & guess when it will end!

The "why" seems to be always debatable.
The "guess" is just that. Educated guesses have made me more money than any other thing I have ever tried which is everything from condom vending machines to building wishing wells. LOL

[paul67]

Just read the artical, blokes an idiot , there might have been 4500+ chevelles built , but if 2000+ got scrapped , 500+ rotting in back yards, 1000+ broke for spares leaves less about on the road than most ferraris cause how many would be broke ,scrapped or rotting , not many . We used to have a yamaha moped over here in the uk in the 70s everyone had 1 use to be $300 brand new , now rare as rocking horse , they fetch over $7500 on ebay restored and you can buy the bits to do them up , but try to find 1 , as i said its not how many are built its how many are left.

[andrewb70]

The "why" seems to be always debatable.
The "guess" is just that. Educated guesses have made me more money than any other thing I have ever tried which is everything from condom vending machines to building wishing wells. LOL

Here is a great book that talks about these topics:

http://www.gladwell.com/tippingpoint/index.html

Andrew

[Beegs]

Here is a great book that talks about these topics:

http://www.gladwell.com/tippingpoint/index.html

Andrew

Looks like a good book, I think I'll pick it up. thx

[Bob Johnson]

What are you going do with an LS6 Chevelle? Does this nitwit really think people are driving those old Ferraris, let alone drive them hard? You can’t have fun with a hemi-powered Challenger? Does this guy remember how the ‘exotic’ car market died a decade or so ago?? Right or wrong, he comes off as rather pompous. I think he is right, but his thought process is wrong. To me, he is doing the equivalent of picking a football winner based on uniform color.

If he is just talking about high end cars, I don’t think he is wrong about price correction or dropping or whatever, and because prices are so high, it will be more noticeable in raw $$. I think he wrong on the ‘why’ part, because his perspective is wrong – I think his basic assumption on why guys buy big $$ cars is wrong. Based on his occupation and ‘knowledge’ of cars, he believes that high end cars are bought because they are desirable driving machines. His reality skews his premise.

I see two basic market segments for cars (drivers, not projects, etc), below $50k, and above $50k (I’m sure the breakpoint is arguable). IMO, high $$ cars are more often than not bought 1) as investments and/or 2) for bragging rights. The guys buying big $$$ cars are a small, rare breed with whom I do not share a frame of reference. But I have no issue assuming that 80% of these cars are not bought because they are desirable driving machines.

However, IMO, the ‘lower level’ car prices will likely drop a little or remain steady due to our friend Supply & Demand. The later group I dub the “Average American Joe”. And I think there are a lot of AAJs out there with money, memories & dreams. And IMO, Joe doesn’t want a Ferrari. I consider myself an AAJ, and I for one never wanted a Ferrari. I always saw them as temperamental, hard to fix prima donnas; driven by people you could describe in similar fashion. I want a car I can drive hard and put away wet and then repeat the process tomorrow. Hard working cars for hard working people. Maybe it is an American work ethic thing or something.

We just had a similar conversation at NastyZ28 on this topic. Here are my thoughts I posted maybe a month ago.

if the supply is increasing, you can't prove it by me. It's very hard to find a quality piece nowdays. There aren't nearly as many nice cars for sale at any of the Car Corral type events..when you do see one they are as high as giraffe nookie..Yes they are pulling a few out of the barns etc and cars not worth doing in the past, now are, but the demand has gone up more than that has supplied. Talk to any classic car selling place..the main problem is finding good stuff..If there is an adjustment, it's going to be in the ultra rare stuff that's gone completely out of sight, not the regular stuff and the modified cars. Their market is not based on rarity, but on value to build or replace and supply and demand. Martin is saying exactly the opposite.

[BonzoHansen]

..If there is an adjustment, it's going to be in the ultra rare stuff that's gone cimpletely out of sight, not the regular stuff and the modified cars. Their market is not based on rarity, but on value to build or replace and supply and demand. Martin is saying exactly the opposite.

Yeah, that is kind of what I am saying. The upper market is more likely to 'correct' or whatever term you like.

On supply, I defer to you guys that live this daily, so I would not argue that at all. It just seems like there are more cars for sale then in the past. Of course, seems is a highly scientfic term that requires advanced quantum physics to calulate.

[67SSDan]

sure..as long as you don't say the "N" word with it..

*LMAO* I love this guy. Welcome back BTW... Glad to see your back at your old antics!

[Bob Johnson]

Yeah, that is kind of what I am saying. The upper market is more likely to 'correct' or whatever term you like.

On supply, I defer to you guys that live this daily, so I would not argue that at all. It just seems like there are more cars for sale then in the past. Of course, seems is a highly scientfic term that requires advanced quantum physics to calulate.

requires advanced quantum physics to calulate.

I don't know quantum physics much less calulate (whatever that is)
But I can just calculate it by the seat of my pants when I can't find anything to put in inventory when I go to Carlilse, Hershey, Charolotte etc. Everything is crazy priced or just junk..

[Bob Johnson]

*LMAO* I love this guy. Welcome back BTW... Glad to see your back at your old antics!

You're one of the few...but us bald guys have got to stick together..lol