2018 Roadster, just over 10,000 miles.
Auction ended at £34,000, with "reserve nearly met" (this had been reduced). Bonhams were estimating £40,000 - £45,000. That's the problem with auctions, it needs at least two people who want the item to get the price up.
If I didn't already have a Mog, I would have been interested, and at £35,000 (which, I assume, would then meet the lowered reserve) plus 7% auction premium I reckon that would be a bargain.
'An auction will always find the true value of anything!'
We've seen all this before in the early 1990's, I was involved in classic and vintage restoration at the time, I came into the industry at the end of a boom and witnesses the crash that came after it. People were desperate at that time, as values plummeted at the extreme end of things cars were being hidden and owners were claiming they'd been stolen to claim the agreed value from their insurer, with Lord Brocket being the most well publicised case but many more were up to the same stunts.
At the other more honest end of things restored cars started to flood the auction houses, we were bringing in Healy's & E-Types in from the States at the time and restoring them at a reasonable margin, this business model literally collapsed overnight. If you could buy a nicely restored E-Type for 20% less than having one restored, and you could choose from three example's in an auction plus have it tomorrow, why would you buy one from me and wait two years for it?
This was when I learnt that an auction will always find the true value of anything!
The challenge for auction houses right now is vendors are living in the past and insist on setting their reserve price based on where the market was two years ago, but the reality is we are now in very different times. The uncomfortable truth is the market is at least 20% down on where it was 24 months ago, but despite overwhelming evidence proving the 20% drop vendors just don't want to accept the situation, so reserves are set way above the car's true current market value, and as we've seen of late most of the catalogue fails to reach its reserve so simply doesn't sell.
Auction houses need to sell cars, so they must start to have the difficult conversation with their vendors to correctly set expectations, if they fail to set realistic expectations in their vendor's minds, everyone will lose! Luxury watches, leisure boats, classic cars etc etc, they're all discretionary purchases, by that I mean nobody truly needs these things in their lives like we need shelter, food and heating. For example, when it comes to a choice between paying your mortgage or owning a classic car, it's pretty obvious the classic car must go, the trouble is when many others are in the same financial position the market becomes flooded.
The other thing that happens simultaneously during difficult economic times is buyers become very thin on the ground, don't get me wrong, there are still plenty of people with spare cash in the bank out there. However, when these same people are not feeling especially confident that their jobs are secure, that spare cash isn't going to be spent on a discretionary purchase like a classic car, it's staying firmly in the bank 'just in case' it's needed to keep a roof over the family's head and or pay the crazy gas & electricity bills we've all been suffering for a good while now.
So with the market flooded with cars and buyers conspicuous in their absence, the age old rule of supply and demand soon takes over and the market naturally corrects itself.
That's what I mean when I say..... "An auction will always find the true value of anything!"
But history remains our greatest teacher, just like those dreadful days in the early 1990's, while it's painful now, the situation will improve. It's a slow process, but the economy is cyclical, to inhale it must exhale. We are currently at the point of maximum exhalation, so if you're thinking of selling but can hold on, do so. However, as with everything in life it's important to remember where there are losers there will also be winners, so if you're a buyer, for sure there are some fantastic bargains to be had out there right now.
But what to buy? We'll I'd suggest avoiding anything with a large thirsty engine unless you're talking blue chip investments like a Lamborghini Countach, vintage cars have also not been doing well for some time now, and are unlikely to recover anytime soon as they are seen as impractical to use and challenging to maintain. Sadly Morgans are no longer immune the market forces, the over supply of the CX platform cars, current market conditions, and a younger group of buyers who likely see Morgans as 'Fuddy Duddy' have all conspired to drive values down. This despite a modern Trad 4/4 or Plus 4 actually being a very practical classic car to own, you could say a modern Trad is the original factory built resto-mod!
So, if you're lucky enough to be in the market for a classic car right now, and you're also looking for something that's likely on the way up, a hot hatch from the early 1990's is a pretty safe bet. As a new generation of younger classic car buyers enter the market they are clearly aspiring to own such cars, and when we get to 2033 your hot hatch will become 'historic vehicle' status, at which point you'll see another jump up in value.
