While some sectors have slowed, the right classic still pulls good money
Interest rates keep climbing and houses are getting harder to sell. All we need now is news of US banks going broke and we know we’re in trouble. What? When?
Money spent on vehicles that won’t be used as regular transport is an indulgence. It normally occurs when financial risks and pressures are low and when the cost of a car might come from selling an underperforming investment or tapping into home equity.
Once those avenues of acquisition close off, the funding choices come down to risking any savings you have or whatever amount you are able to borrow. Either option can commit the buyer to paying the lowest possible price rather than considering quality. Cutting corners will become more apparent the longer you own the vehicle.
GT Falcons and early Monaros were some of the first Aussie muscle cars to boom in value
At this point in time, a rerun of the Global Financial Crisis seems unlikely. However, if the banking decline spreads and sources of funding tighten further, anyone holding cash will enjoy some interesting opportunities.
As occurred when a plunge afflicted local muscle car values back in 2007-09, there will be more to this imminent decline than the misfortunes of some US banks and mortgage brokers.
Australia back in the Noughties had recovered from recession, property prices had climbed and interest rates were low. Today we see a tightening money market and anticipation of a property slump, with effects most commonly seen at the top end of the speculative vehicle market.
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Demand 15 years ago for quality vehicles was fierce and Australia during 2006 had begun to run out of really good muscle cars. Those that remained in the market were sometimes offered at ludicrous prices, including an exceptionally nice GTHO Phase 3 Falcon at an equally exceptional $1 million.
Prime targets during The Boom were XW and XY GT Falcons and GTHOs, HK-HT 350 Monaros, competition spec Toranas and E-prefix Chargers. It is no coincidence that these during recent years have seen values increase again, however most are still waiting to recoup the amounts spent on them 18 years ago.
Declining values, then as now, won’t affect all models equally. Some which looked to offer better value attracted people who were shying away from mainstream muscle models. Think K Code 351 Fairmonts and Fairlanes, HQ Monaros and early HSVs, which will again prosper as demand for Tier One versions tank.
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Bodywork and paint is a major expense
Anything with a sensible sticker on the screen or achievable auction reserve still sells. Despite the year 2023 being barely out of nappies, we have so far seen four major auctions of interesting vehicles conducted, with plenty of lots finding homes and not all of them at bargain prices.
Where problems arise will be in the commercial and private markets, where some vendors haven’t adjusted to altered circumstances. Gaps between wholesale and unadjusted retail prices will grow, sending more buyers to online auction platforms. Then there are vendors who either have no idea what their vehicles are worth or are looking to recover every cent outlaid on restorations of dubious quality.
This situation was highlighted by a friend who mentioned she had been looking online at EH Holdens and couldn’t understand the gulf in pricing of cars that looked remarkably similar.
EH Holden values have soared in recent years and sit within the #45-55K range
A good original or older resto EH will be worth $45-55,000. Some will be modified, but not significantly. Outstanding restorations and serious modifications can generate up to $75,000, however $90,000+ requires a cabinet full of show trophies to accompany the car.
Quality is a factor in pricing and it isn’t always possible to tell without a close and personal inspection just how good a job the restorer, painter and trimmer has done.
Unless the car is running an engine that’s been hand-built to competition specs, with a gearbox and diff to match, then full mechanical restoration isn’t going to run far past $20,000. Suspension and brake parts are available and not expensive, trimming in material similar to the original grained vinyl isn’t costly or difficult.
HSVs of all eras are now desirable
Body restoration adds massively to expense and anyone who has spent big resuscitating a totally rusty shell is in for a big shock when time comes to sell. Unless the market moves suddenly and significantly upwards, short term gain on a major restoration is usually impossible.
Believing that the world will want the car of your specific dreams is a common mistake too. Spending squillions having an old car engineered to accept modern mechanical components then adding custom paint and trim is understandable if you intend hanging onto the car forever. Finding someone in the used market who wants to shoulder the cost of your self-indulgence will be difficult.
From Unique Cars #478, May 2023