Each month here at Shift Brokers we review the current trends in car values, with a particular focus on how those trends impact enthusiast vehicle valuation. Not only is the value of enthusiast vehicles important, it’s a significant factor in ensuring you get the right insurance coverage. In fact, other than how the car is used, valuation is likely the next largest piece of what makes insurance for car people different than your typical policy. And as we often say, you don’t need to have a classic car or a traditional collectors vehicle to benefit from ensuring you have the right valuation associated with your insurance policy.
Valuation Trends For August 2023
As we’ve gotten well past the half way point of the year there is a very clear trend developing in used car prices, and that trend is a decline in values from peaks across the board. Still, prices remain elevated compared to their historic values.
Chart is courtesy of Manheim/Cox Automotive.
Overall, values have been declining significantly this year. Still there remains pressure buoying prices thanks to low retail stock, particularly amongst specialty models. However, the clear trend moving back towards mean likely means there will be continued declines.
Consumers’ views of vehicle buying conditions improved, and now are at the highest point of the year. However, that is offset by higher interest rates combined with historically high prices. Taken together there is still an overall negative sentiment towards used car prices.
While prices are declining, other factors preventing significant hold or drop movement has been the combination of lower supply. This market definitely tends to favor buyers with liquid capital. Still, with supply limited, expect sellers to try to maintain their leverage gambling on the lack of stock to avoid the need to discount heavily, at least with popular models.
Hagerty Valuation Trends Follow Larger Macro Trends
In addition to the larger macro trends around used cars, Hagerty’s enthusiast and collector specific trend chart shows these values largely following the overall market.
Chart is courtesy of Hagerty
Other Trends Of Note
Trucks Out Performing The Larger Market
Within individual market classes, trucks and SUVs are maintaining their value the best. What’s an interesting note is that SUVs, while performing better than cars, still saw much larger declines. This is more in line with other expensive vehicles, rather than with trucks and other large or high value vehicles. While this may not hold universally true within collector or enthusiast markets, it does show that trucks continue to be an outlier.
Are Smart Enthusiasts Selling?
It’s hard to ignore the feeling that we are on a downslope of car values from these historic highs. For owners of vehicles where prices are particularly elevated over historic trends, there is a certainly a sense that smart enthusiasts may be looking this as an opportunity to sell. While it’s always hard to predict the future, it’s hard to ignore the clear trend forming.
The decline in used car values shouldn’t come as a surprise. The trend has been forming all year, and given the declines in other pricing, it stood to reason that used car prices would follow. We continue to see highly sought off models resisting the price declines better than readily available models, which also should come as no surprise.
Still, as there remains a backlog of orders on new cars, particularly models from sought after makers like Porsche, there will continue to remain a segment of the market that is disconnect from the macro trends. Given these buyers are also often capital strong, there will remain plenty of competition for the best models.
We’ll be back next month to see where the trend goes and how new macro factors (rising gas prices, falling inflation, stock market) may continue to impact enthusiast and overall valuation trends.
Shift Brokers Can Help You Navigate
Shift Brokers is insurance for car enthusiasts. We can help you understand the how different carriers will value your specialty car. In addition, we can help you select from insurance companies that will get you the kind of service and coverage you need. And because we are car enthusiasts and specialize in policies for car enthusiasts, we can help you navigate the unique needs and situations only car enthusiasts find themselves in. The best part is, because we are brokers, we represent you, not the insurance companies. There is never any obligation to work with us.
Informational Purposes Only
As with all of our blog posts with tips and suggestions about car insurance for enthusiasts, these are intended as general information. Nothing in this article should be considered insurance, legal or financial advice.