The Hagerty Market Rating measures the current status of the collector car market in terms of activity or “heat,” directional momentum, and the underlying strength of the market. It is expressed as a closed 0-100 number with a corresponding open-ended index (like the DJIA or NASDAQ Composite). To learn more about how we calculate the Hagerty Market Rating, read here.
The Hagerty Market Rating is back in the 50s, after a 0.45-point decrease this month. The new value of 59.82 is lower than two months ago, when the rating dropped below 60 for the first time in nearly 5 years. While the descent appears to be slowing, it’s still uncertain how low the Market Rating will get if this trend continues.
The Hagerty Market Index, an open-ended stock market-style version of the Market Rating, dropped slightly this month by 0.32 points. It’s a small drop, but this marked the 11th time in the past year that the Index has decreased, which continues the trend we’ve been seeing since its high point in December 2022. Since the Hagerty Market Index peaked at 206.09, it has decreased 28 out of 30 months, falling by 16%.
As we head into the summer driving season, auction activity has slowed. Though we are still seeing nearly 5000 sales every month, the number of cars sold decreased for the first time this year. Auction Median Sale Price continued its 26-month losing streak, with another 0.1-point drop. However, this time it was solely related to inflation, as the real value of $27,300 remained unchanged from last month.
On the private side of the market, things are looking a little brighter. While the ratio of cars selling above their insured value dropped to 37.8 percent—its lowest value in nearly 4 years—Average Sale Price between private parties increased enough to surpass inflation.
The eagerness of Hagerty members to increase their insured values is slowly disappearing. The ratio of insured value increases-to-decreases for cars valued under $250K has dropped below 7-to-1 for the first time since the fall of 2021. At its peak in November 2022, this ratio was 17-to-1. For vehicles valued over $250K, the value increase-to-decrease ratio has leveled out around 1.4-to-1 for the first half of the year. At its peak in October 2022, this ratio was 6.1-to-1.
As the greater economy continues to stave off a recession, our industry experts are less optimistic about the classic car market. This month marks the eighth time in the past year that our market observers have rated the market below 50, which is in the “contracting market” range. They have expressed that the market has not “found a direction,” and that many large buyers and sellers are sitting back and waiting it out. The expectations between buyers and sellers appears to be at odds, with very few lots selling above the high estimate set by the auction houses, and the majority hammering below the low estimate.
Next month, a new edition of the Hagerty Price Guide will be released. As we have witnessed the market softening over the past quarter, it will be interesting to see if it is reflected in the real values of the price guide. We will need to wait until next month to see how these value changes in the Price Guide effect the Hagerty Market Rating.
I think of it as correcting as prices on many cars are artificially high.
Auctions have distorted prices.
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