Classic car sales in Monterey grind to a halt as new generation takes over

A version of this article first appeared in CNBC’s Inside Wealth newsletter with Robert Frank, a weekly guide for the high-net-worth investor and consumer. subscription To receive future releases, directly to your inbox.

Auction sales during Monterey Car Week were down 3 percent from last year, as a shift from older to newer cars created a backlog of unsold classic cars from the 1950s and 1960s.

Total sales at this year’s five Monterey car auctions — RM Sotheby’s, Broad Arrow, Gooding & Company, Mecum and Bonhams — fell to $391.6 million this year from $403 million in 2023, according to Hagerty, a classic car insurer. That follows a 14% decline last year from a peak in 2022.

Of the 1,143 cars on sale, only 821 were sold, a 72 percent sell-through rate, according to Hagerty. The average selling price was $476,965, down slightly from last year’s average of $477,866.

Wealthy car collectors still have plenty of money to spend, and feel confident in the recent stock market rally, but the types of cars they want are changing, experts say. There were simply too many similar cars at too many auctions to generate strong prices and sales.

“It’s saturation,” said Simon Kidston, founder of Kidston and a leading adviser to wealthy car collectors. “When I went around auctions and saw so many similar ‘items’, I wondered if anyone had thought about what they or their competitors had actually consigned, and whether the cars were competing for the same buyers. Add to that the fact that many entries have been sitting in dealer windows for months or years and it always seems like sloppy seconds.”

At the same time, a new generation of collectors is driving the market—primarily Gen Xers and millennials—who prefer cars from the 1980s, 1990s, and 2000s. Classic cars from the 1950s and 1960s that fueled the market for decades and were hugely popular with baby boomers are flooding the market and failing to find buyers.

The Monterey sale rate (or percentage of cars that actually sold at auction) was a paltry 52 percent for pre-1981 cars priced at $1 million or more, according to Hagerty. The sale rate for cars less than four years old was much higher at 73 percent, proving that young collectors are now in the driver’s seat.

Hagerty’s Supercar Index of sports cars from the 1980s through the 2000s is up more than 60% since 2019, while the Blue Chip Index of Corvettes, Ferraris, Jaguars and other iconic classic cars from the 1950s and ’60s is down 3%.

A small number of rare and genuine masterpieces are sure to still fetch high prices. This week’s top car was a 1960 Ferrari 250 GT SWB California Spider, which sold at RM Sotheby’s for $17 million, while second place went to a 1938 Alfa Romeo 8C 2900B Lungo Spider, one of only five in existence.

However, the broader changing of the guard in classic cars, especially as many collectors begin to sell or downsize their collections, is likely to impact vintage car prices for years.

“From an auction perspective, the market continues to take a breather as we move from what was once popular, think Enzo-era Ferraris, the so-called full-fledged classics and sports racers of the 1950s and 1960s, to the emerging modern supercar segment,” said McKeel Hagerty, CEO of Hagerty. “The divergence between vintage and modern cars has accelerated.”

Some say high interest rates are also putting pressure on the classic car market. At the low end of the market, many buyers were using financing to buy cars and build their collections. At the high end, higher interest rates have increased the opportunity cost of buying a classic car.

“People think, ‘Instead of that million-dollar car, I could have made 5%, maybe 10% if I had a great manager,’” Kidston said. “That, more than anything else, makes people think twice. A collector car is part investment. There’s no other reason for the increase in the value of collector cars over the last 40 years than the investment angle.”