Gents, while surprised at this article when you look at all the forces at play it begins to paint a clear picture. Classic cars are really hot right now and it’s been going on for awhile and it’s moving through various models and makes. The price of Supra’s, RX-7s and so many other cars are in the ludicrous levels. First it was the 240 then 280 and now the ZX. So here’s what I think is happening, because this is happening more than just classic cars. He’s my break down of all the forces at play.
1. COVID made people sitting at home get the desire to start a new hobby….classic cars is a popular one.
2. The massive expansion of the money supply, the Federal Reserve has been on a printing spree. The machines are running 24/7. The US and printed 25% of the dollars in existence in the past 12 months. More dollars chasing less supply.
3. Inflation (partly due to the above). Prices in May climbed to record levels, and the fed has made it clear…printing will continue at rate of 120 billion a month for the foreseeable future and no rise or interest rates until maybe 2023.
4. Classic cars are the number 2 best investment next to rare Whiskey. People want a place to put their money where is will be worth more next year than this year. So people are buying classics. Why leave month in the bank where it gets no interest and is worth much less the next year. I bought my 280z in Dec 2017 for $3700. Had I done nothing to the car I believe I could sell it today within a week for 2x what I paid.
5. New and used cars are crazy expensive right now due to serious supply issues. I bought a new 2021 Suburban last Nov and paid 7k under sticker. When I went to sell in my 2017 Outback then I was offered $17,200 by Carmax. Last week Carmax offered me 22k Two days ago I received and email from the dealership I bought the Suburban from. They said they wanted to buy back my Suburban. I called and they offered me MSRP, unseen . That’s a 7k gain with 8,000 miles and 6 months old, but I’m not selling, In what world we’ve ever seen has that happened, I went online to see what’s happened and read that dealerships ware selling above MSRP. For the Suburban it’s 4K-8k above MSRP.
Everything we buy is going up and that’s impacting everything from furniture to classic cars. Gas prices have almost doubled since the election and food and lumber prices are way up Has anyone tried to buy appliances, furniture or a boat recently. Don’t….you won’t find many. I’ve been waiting since Jan for outdoor furniture.
So you have to look at it from what the dollars purchasing power is not the actual number. That’s part of the problem, but here’s the really reason……. Class Z’s are awesome cars and the world is finally recognizing it….something we all already knew. So 20% is rising prices all around and 80% but the Z is a beautiful, fantastic car.