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Classic car bubble


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#1 d3c0y

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Posted 17 June 2015 - 09:35 AM

http://jalopnik.com/...dium=socialflow


Read and discuss. I think this that Michael is on the money here and to be honestly i don't really care what my zed is worth (apart from insurance value) as mine's a keeper.
Porsche is definitely a marque that is supremely over valued currently and as stated about to be joined by the "bad ferraris".
I want lower classic car values so i can afford to own more of them!
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#2 260DET

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Posted 17 June 2015 - 10:19 AM

What amazes me is the difference in price between beetle Porsches and the 944 the prices for which vary wildly but go nowhere near the beetles. A reasonable 944 can be had for under $10k, cheaper than a sound S30. But of course real men drive beetles not 944's  8)

#3 Classicman

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Posted 17 June 2015 - 10:41 AM

In my humble opinion, I don't think that the bubble will burst on the popular cars.  Its all about supply and demand.  As the years go by, there are more people looking for certain cars.  The number of these cars is pretty static there are a finite number of each car available.  Some are added to the pool through restorations, and others are written off, turned into race cars or retro modded.  Under these conditions, the prices will inevitably continue to rise over time.

Theres an old saying: - "..you never pay too much for a classic, you just pay it too soon...."

#4 gav240z

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Posted 17 June 2015 - 10:48 AM

It wouldn't surprise me if Classic Cars were in a bubble, as with any other asset class at this point. Given globally low interest rates and this race to the bottom mentality with trying to keep interest rates low to compete with what the US is doing and trying to drive exports with lower currencies etc.. This trickle down wealth experiment has failed miserably it's time to raise interest rates again and stop this madness.

Case in point house across the road from me and it's nothing short of very average sold a year ago for 1M, it's now on the market again for 1.6M and it's had no improvements with the exception of a concrete driveway and steps out front. So Sydney real estate is caught in a massive speculative bubble thanks in part to record low rates.

I see no reason why Classic cars haven't succumb to the same fate, as an older demographic starts to die off and particular marque's that generation was fond of don't have the same appeal to the up and coming generation I'm sure their values will drop.

A car like the 1960's Ferrari GTO's (SWB) will have appeal the transcends generations and therefore be less impacted than say a couple of outlier muscle cars. Also cars of global appeal will always hold value, that's why the Porsche's hold value, they are popular cars in almost all countries around the globe, not just the US, Australia or Europe.

Japanese cars have started to kick off in terms of values lately, in particular S30z's, C10, C110's, Mazda Cosmo (which are very rare anyway), Toyota 2000GTs and really they are the blue chip investment of Japanese cars. Most of them quite rare and lusted after.

As with real estate, those who already own the cars are happy to see their values increase, those wanting in, not so much. In terms of Classic S30z's I already own 2 so I'm happy to see values go up, but also wary that higher prices mean people with more money will own them and that in turn will increase prices for rare NOS parts driving restoration costs higher. So it's a double-edged sword.

I don't own a house and given the price of Sydney real estate it's looking unlikely I ever will. But I'd rather rent and be able to indulge in my hobby than be a slave to a mortgage with no money left over for anything else.

If there is a market correction in classic cars I think the highest value cars will take the biggest hits, for example a Ferrari GTO could loose a couple of million off it's price and still remain unobtainable but that's a huge value to shed.

Do I think S30z's will loose value? Hard to say, they could loose 10-20k from the top of market cars. But I think they are a relatively practical classic in that they are reliable, relatively easy to source parts for and have appeal across generations (when I took my 240z out last time I was in Melbourne a young fella maybe 16-17 was just watching me drive by in awe with his father also looking on, I could relate to how he felt because 15-16 years ago I was that kid). Thing about S30z's, unlike Mustang's, Camaro's etc.. is that relatively fewer numbers of them were made so their rarity (not helped by rust) will help them hold value over the longer term.

But in general I really hope central banks raise interest raise and take the hot air out of the property and asset markets in general.
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#5 gav240z

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Posted 17 June 2015 - 10:49 AM

Theres an old saying: - "..you never pay too much for a classic, you just pay it too soon...."


Very true.

What amazes me is the difference in price between beetle Porsches and the 944 the prices for which vary wildly but go nowhere near the beetles. A reasonable 944 can be had for under $10k, cheaper than a sound S30. But of course real men drive beetles not 944's  8)


Having driven a 944 recently I would agree. They are very under-valued. I also think the first generation RX-7 falls into the same category. Lots of early 80s cars are there though, and probably won't take off for another 5-10 years.

#6 hmd

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Posted 17 June 2015 - 10:59 AM

There will be a correction in classic cars/house (and other assets) price.

We just don't know when, the size of the correction and how much the rise in the bubble before the correction.

e.g. house prices could go up another 50% before a 40% correction

#7 gav240z

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Posted 17 June 2015 - 01:50 PM

I can't recall if I shared this video or not on here already?

But it's very topical to this discussion.


Well worth listening to all the way through.. Some funny stories in there also.

#8 G

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Posted 17 June 2015 - 02:21 PM

With all due respect, it's not ALL about supply and demand.

It's about fear, greed, supply, demand, nostalgia and a host of other factors.
The late 80's/early 90's classic car mania and eventual bust highlights that.
As a classic car fan across multiple marques I applaud the fact that great cars which were uneconomic to repair or cherish, can now have the maintenance and restoration dollars thrown at them.
If it wasn't for the boom/bust 25 years ago we would have a lot less E-Types etc on the road.

This is an asset class which has no income and no capital value-add.
As an academic exercise it's interesting to follow the path of "value", however for my mind, too much written space is given to the issue.
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#9 74zzz

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Posted 18 June 2015 - 09:36 PM

The one to watch is the e30 coupes..... These things will be worth something soon.... M3 is already there but the 318is baby m3 is the one to grab now. Although I may have found one that has made me consider selling my z..... Has all m3 suspension and brakes plus the s50 3.2 conversion..... Cant believe I'm considering but they are just a brilliant modern classic

#10 Gordo

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Posted 18 June 2015 - 10:23 PM

If you get a chance , drive a R32 GTR, so nice to drive. Surely these will be Classics.
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#11 44014

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Posted 19 June 2015 - 07:26 AM

If you get a chance , drive a R32 GTR, so nice to drive. Surely these will be Classics.


They all ready are. They have not decreased in value for about 10 years now and are creeping up for the good ones!
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#12 260DET

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Posted 19 June 2015 - 09:03 AM

Good thread, it's nice to read real car enthusiast comment without the fanboi now drivel. It's taken a long time for the S30 to be recognised as a classic enthusiast's car and not just a cheap Jap car to use, abuse and throw away. When you think about it the S30 suffered in reputation simply because the Japanese were able to manufacture cars more efficiently than the British for example and so were able to sell them at relatively cheap prices.

Perhaps they would have been better off making fewer and selling them at a higher price. Then they would have been valued more by owners and so more likely to have been better looked after and maintained.

#13 44014

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Posted 19 June 2015 - 09:06 AM

Good thread, it's nice to read real car enthusiast comment without the fanboi now drivel. It's taken a long time for the S30 to be recognised as a classic enthusiast's car and not just a cheap Jap car to use, abuse and throw away. When you think about it the S30 suffered in reputation simply because the Japanese were able to manufacture cars more efficiently than the British for example and so were able to sell them at relatively cheap prices.

Perhaps they would have been better off making fewer and selling them at a higher price. Then they would have been valued more by owners and so more likely to have been better looked after and maintained.


And there for would not of sold and have a following ... cant have your cake and eat it

#14 gav240z

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Posted 19 June 2015 - 09:33 AM

I suspect part of the problem was bigotry and bias because they were Japanese made had a big part in it. I have to admit I'm somewhat like that now with Korean cars. I'm like pfft, people won't want a classic Hyundai etc.. but then I realise it was probably similar to the way the Japanese cars were viewed not that long ago.

I'm sure Hyundai will make a cult car eventually - just none that I've seen yet.

#15 260DET

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Posted 19 June 2015 - 09:42 AM

It would have been interesting to see what would have happened if the S30 was offered at a price more in line with other comparable sports cars. No doubt that prejudice would have come into it but perhaps also a bit more respect. Let's face it, the price of a new car has a lot to do with how many buyers see a potential purchase, in today's new car market price is often determined by what the opposition is selling something comparable for and not by what it's cost to build which I think illustrates the point.

#16 74zzz

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Posted 19 June 2015 - 09:50 AM

Have a mate that bought an import gtr and ended up spending 30 grand on an engine rebuild after it blew up 2 months after purchase was to be kept original but after spending that much on a decent motor it is now a road registered striped out track car......I hear reliability is an issue with the r32s, there was a fb page set up by some aussi guys titled 'R32s on trucks' obviously set up because of their bad experiences with them :) ......being one of the first super computerised supercars all the electrical gear is a massive turn off for me.... so many things to go wrong:) plus turbos etc.... My draw to the e30s are the balance/weight/practicality/manufacture specific conversions/techno free :) However the one i am considering selling my z for has the vanos s50 which can be a costly beast to maintain but its in a base model coupe chassis with no power windows/sunroofs, no intricate computer systems...just a hitech 230kw engine/6 speed/lsd/big brakes in a simple uncomplicated package that handles like a gokart :) The Aus imported gtr is the one to get.......see them come up from time to time with 50K plus prices another turbo modern i had considered was a stock 2 door sti from 99 (22b too expensive)......still reasonably cheap but maybe a little too rice for me,  they really sealed the deal for subaru and were the signature car for the now famous WRC blue paint ...... what this conversation is telling me is that I just need a bigger garage.....and a lotto win....

#17 hmd

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Posted 19 June 2015 - 09:59 AM

I hear reliability is an issue with the r32s

Only because most can't resist 'tweaking' them.

what this conversation is telling me is that I just need a bigger garage.....and a lotto win....

don't we all

#18 74zzz

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Posted 19 June 2015 - 10:33 AM

yep you are right and at the time I think he was 22 so probably wasn't being to kind to it either:) I think from memory he said it was running 15psi on an otherwise bone stock set up......not sure what they run normally and 15psi doesn't sound too crazy but if being abused by a 22 year old and other young lads before him im sure it was a recipe for the disaster he had to shell out for.

#19 gav240z

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Posted 19 June 2015 - 10:46 AM

Only because most can't resist 'tweaking' them.


Same problem the FD RX-7's have really, people modify without knowing what they are doing and boom there goes an apex seal out the exhaust. The tune is crucial to the long term reliability of either car (RB26/ 13B) I'm sure.

I considered an R32 GTR but anything with a 4WD gear box put me off, sounds like a nightmare to change a clutch in. I do think they are cemented as a classic car in the future though. Good original AU delivered cars are already fetching $50K at Shannon's auctions. Examples below.

http://www.shannons....1/#.VYNlxBOqr1k

http://www.shannons....e/#.VYNlzBOqr1k

http://www.shannons....d/#.VYNl2hOqr1k

The grey imports are still cheap...in comparison.

I must say what I enjoy about the S30z's is how easy they are to work on compared with new stuff...That is part of the attraction with older cars for me.





#20 74zzz

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Posted 19 June 2015 - 11:05 AM

yep definitely old cars = simplicity......but reality has kind of kicked in with the practicality of the z unfortunately.....love it and was something I was hoping to hold onto forever as it has been a much needed distraction at various times over the past 14 years ..... but 2 seats, old car continual tinkering/lack of time to spend and the prospect of kids in the near future, I just don't want it sitting around becoming one of the many classics falling into the disrepair due to lack of drive time and upkeep.........if i had say 15-20 grand i'd get everything done the way i want- one hit and then enjoy it for many years but continual tinkering means i cant enjoy it like i would like:)




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