Jim’s Blog: Buy, Sell or Hold?

Coronavirus is on the news. The stock market seems to be falling more each day. Your local store is all out of hand sanitizer and toilet paper. 

What does that all mean for the car market? If you were planning on making a classic car move in March or April, be it a buy, sell or hold, should your plans now change?

Well, I can’t predict the future, but we can learn a few things from looking at the past, at least in terms of challenging market situations and how the auction world has reacted.

Roll back to 2008. The housing boom crashed, and along with it came the car market — or more specifically, the market for American muscle. Values dropped quickly across the board, which thinned the market of really great consignments. Their owners simply buckled down for better days versus selling off for less than what they thought their cars were worth. 

There is, however, one key difference here. The market in ’08 was a very different place than the market in ’20. Current buyers and sellers have already been trained to look for the best versus the rest, maybe as a result of the fallout of ’08, and prices have already adjusted accordingly. Generally speaking, I don’t think there have been many inflated prices recently for cars that didn’t deserve those premiums (except for maybe first-gen Ford Broncos). I don’t think I could have said the same thing in 2008, when anything with a Hemi was considered better than a 401(k).

The main takeaway from the ’08 crash, at least for me, was this: The best cars, with the best condition, history, paperwork and equipment, tend to do just fine, especially over time. Any virus-related global economic adjustments shouldn’t really change how you’re looking at the car market in 2020. Keep hunting for the best cars you can find and try to get them for the best price you can.

The wildcard here is the virus itself. Will it impact auction attendance, and therefore bring prices down due to less competition? I doubt it, as most auction houses these days allow for phone bidding, and car people can’t resist looking at cars, especially online. Those buyers looking for their next car (and a deal) will still be watching cars cross the block even if they’re not onsite. In fact, they’re probably going to be watching more closely.

So how about it? Should you buy now? Sure, if the car and the price is right. Sell? Only if you’re getting what you think the car is really worth — and I don’t mean what you THINK it’s worth, but what it’s really worth. Check recent ACCs for comps. Hold? Never a bad idea, especially if you still like owning the car in your garage.  

The one thing you absolutely should do? Wash your hands.

4 comments

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  1. This isn’t directly on point, but since you mentioned the virus’ impact on auctions, I’m wondering what you think its impact will be on car shows. We’re coming into the season with many major and local events planned. As they draw large crowds, will there be a trend to cancel them as has happened already to some athletic events? I’m interested to know what you predict.

  2. Good article. Also the good news is, there is a chart by First Trust Portfolios titled “Epidemics and Stock Market Performance” comparing 12 epidemics going back to 1980. Only HIV/AIDS had negative results (and that may have been just coincidental.) Of course this time may be different?
    What I do think is different is that the Babyboomer car owners, because of there age, may not have time to wait and sell. We are 12 years older now.

  3. As it stands today, I might have second thoughts about attending a huge auction where there are thousands of general admission attendees packed into tents, but a smaller sale or an outdoors car show wouldn’t be too worring.

    Use your head, you can always panic later if warranted.

  4. Jim, I am in AZ right now and came for 2 events. The first was Mecum Glendale and the other was Good Guys. I ended up just watching Mecum on TV and saw some cars get good money despite the crowd.
    On a different note, I did attend the Mannheim Dealer Auction on Thursday in AZ and learned that they will be going to a online format going forward until the virus is better under control.
    The last event was the Good Guys show, to show off my new 61 Invicta Bubble Top. However, the sad news is, it is now cancelled. I will be heading back east soon and hope that as the weather turns so will our grip on going back to normal.
    As far as sales, my buddy shared a story last night of a incredible camaro build, that after 11 years of restoring was sold yesterday for 7 digits, so that reinforces that the right car and the right buyer may still be out there.