“We are in the middle of a sea change in the collector-car world. In my three decades of publishing Sports Car Market, I have never seen anything like it.” —Keith Martin, Publisher, Sports Car Market
“The determining factor of value for unicorn Youngtimer/NextGen cars is not how many were made, but rather, how many investment-grade examples are left.” —Philip Richter, Founder, Turtle Garage
A few years ago I learned an important lesson about rarity. Sarah and I were treated to a private tour of one of the most exclusive private car collections in North America. When we arrived at the owner’s Connecticut estate, there was a Mercedes 300SL Gullwing parked in front of the car barn. Sarah marveled at its beauty. Sounding like an expert I proudly proclaimed, “That is a 300 SL Gullwing. It’s a rare and beautiful car.” From behind us, a deep and stern voice emerged, “GULLWINGS ARE NOT RARE CARS… ALLOY-BODIED GULLWINGS ARE RARE CARS!” A remedial tutorial on production stats by the owner revealed there were 1,400 300SL Gullwings produced—but only 29 were alloy-bodied cars. At one point, this collector owned two of them! This experience gave me a glimpse into how refined and sophisticated collectors think about rarity. (Featured image by Storynory)
Today, a burgeoning subset of the collector car market is in the midst of a shift away from the traditional definitions of rarity. The emerging Youngtimer/NextGen demographic has embraced a new paradigm that we have coined as Modern Rarity. In the past, desirable cars at the higher end of the market were reserved for vehicles that were legitimately and unquestionably rare—one-off coach-built cars or vehicles that were one of only a handful of production examples. A Ferrari GTO or an alloy-bodied 300SL will always dominate any rarity contest—nobody could argue or dispute the scarcity value of these bespoke cars. However, the collector market is changing and a new and unfamiliar dynamic is driving valuations of Youngtimer/NextGen cars. Modern Rarity has more to do with a lack of surviving investment-grade examples and less to do with ultra-low production volumes or one-off historically significant cars. To be a legitimate big dollar Youngtimer vehicle, a subject car must share attributes with a unicorn. It must have a documented provenance from new. It must be preserved in perfect original condition with ultra-low mileage. These strict requirements leave 99% of surviving Youngtimer/NextGen cars ineligible to command the stratospheric valuations that such unicorns command.
The determining factor of value for unicorn Youngtimer/NextGen cars is not how many were made, but rather, how many investment-grade examples are left. Most BMW E30 M3’s were driven, tracked, and used up. The majority of Mercedes 190E 2.3 16’s ultimately became daily drivers that baked under the hot sun in suburban commuter parking lots. Of the 35,000 A80 Toyota Supras that were built, how many of them have under 5,000 miles today? How many were correctly stored and meticulously maintained and properly preserved? Nobody knows for sure but the market at Amelia Island was telling bidders that the number is decidedly low. Most Supras were driven and heavily modified. These types of cars were owned by a demographic that wanted to drive them, customize them, and enjoy them. The buyer of a Supra in 1994 had no interest in saving the car as an artifact of history for future collectors.
Aside from Modern Rarity, the other potent driver of value for Youngtimer/NextGen cars is the burgeoning demographic that can now afford the cars they dreamed of in their youth. What is occurring in the market today is a simple combination of demographics and economics 101: Too many dollars are chasing too few cars. What we have now is a perfect storm for Youngtimer/NextGen cars. There is a shortage of investment-grade opportunities in this cateogry that are being chased by a large and passionate group of well-heeled buyers. Let the bidding begin! Barring a global economic downturn, the nearly $200,000 paid for the Toyota Supra at Amelia is just the beginning.
The June issue of Sports Car Market devotes several thoughtful pages to the powerful Youngtimer/NextGem trends that noticeably accelerated at Amelia Island. Cars from the 1980s, 1990s, and early 2000s are now raising eyebrows on the auction scene. Five years ago, RM or Gooding would hardly have even accepted a Toyota Supra for consignment—regardless of condition. At Amelia this year, major auction houses offered a menu of rising Youngtimer/NextGen classics including a pristine Nissan 300ZX Twin Turbo, a low-milage Mazda RX-7, and a well-sorted Mercedes-Benz 500E. As more unicorn Youngtimer cars come to market, be prepared to see prices rise as successful young people with deep pockets step up and vigerously wave their paddle.
Starting with the latest issue of Sports Car Market, we will produce a regular monthly column that will focus on this emerging market of Youngtimer/NextGen cars. The subject vehicles will represent popular models from the 1985 to 2005 period. On the pages of SCM, we will evaluate, discuss, and contemplate Youngtimer/NextGen cars as well as the complex and ever-evolving market around them. The first article is reposted below and covers the Youngtimer/NextGen action from Amelia Island.
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Good article… thank you. Have also noticed “cuteness” as a new factor in collectability, French 50s small sedans, Japanese home-market vans, Fiat 500s, eastern European sedans, etc.
Quite a contrast to the noble classics of the 1920s and 30s…
Great piece, Philip! The question I have is what this trend will do to the value of the great driver-quality cars. Not the fright pigs that have been ridden hard and put away wet, but rather the cars that may have miles (in some cases a LOT of them) and a little wear and tear, but have been maintained fastidiously over their lives and now offer the opportunity for owners to *drive* the dream as opposed to being garage and show queens. No shame in either approach, but I always like to have cars I can pile miles onto…
Agree 100%.
To apply a partial JFK quote to what’s happening in the market: ““Let the word go forth from this time and place, to friend and foe alike, that the torch has been passed to a new generation of Americans….”
Another reason these “Youngtimer” cars are so difficult to find in good condition is that they were the first generation of cars that were not really built to last — with heavy use of plastics, foam and other “soft” materials that just were not designed to hold up for decades like cars of the 1950s through 1970s were able to do.
The first generation of “disposable” cars….a trend that has only accelerated ever since.
I inherently understand why some folks (of all generations) love to have pristine, low-odometer garage baubles to ogle and show off to others. To me, owning cars has always been more about the EXPERIENCE: driving them as they were intended to be driven; maintaining them to a high mechanical standard; and long-term ownership rather than “flipping” them every year or two.
Here’s a sobering thought. A 1994 Miata is a car that came out 3 years before today’s 24 year-olds were born. That’s an old car to them. To them the 70s, 80s and 90s are like the 40s, 50s and 60s are to most of us. Is it any wonder the TV commercials during the Barrett-Jackson auction are for, prescription medications, CPAP machines, ambulance chasing attorneys, testosterone supplements, and AARP? Times are a-changin’.
Sorry meant 1992 Miata. Dang hay fever pills are making me stupid. Lol
You hit the nail on the head and accurately described the current trends in the collector car market. Just look at the current sales data over the last year on auction sites such as Bring a Trailer where these “unicorn examples” are finding their way to market after years of long term ownership. Many of these owners are cashing in their chips as those seeking their “bucket list” vehicles from the past are ready to dig deep for acquisition. Great article Philip !
took me years to figure out the reason I didn’t relate to auctions, etc., is because I liked a car’s looks and wanted to own and drive it, not invest in it. mildly amusing to watch prices for this and that drop or go through the roof. I’ve had some rare cars that I let go due to loss of interest. of course I wish I’d given them storage space for what they’d be with now, but that’s all