American muscle cars of the 1960s and ’70s have staged a rapid comeback after their crash in 2009. The question now is whether the rally can continue, or if muscle prices are getting overheated.
The question could get answered in the next two weeks as the massive collectible-car auctions in Pebble Beach and Monterey, California, part of the Concours D’Elegance, get underway in mid-August. On the auction block will be hundreds of top muscle cars, some expected to sell for seven figures.
Dave Magers, the CEO of Mecum Auctions, the largest muscle-car auctioneer at Pebble/Monterey and one of the top car-auction companies in the U.S., said the market remains strong and shows no sign of slowing.
“The segment’s been really hot for the past four or five years,” Magers told CNBC. “I don’t see it as a bubble. Bubbles are typically caused by speculation that’s fueled by leverage. When the leverage turns against you, there’s a liquidation event. And that drives prices down. We don’t see that happening.”
He said that along with a selection of Ferraris and Lamborghinis that Mecum will sell at Monterey for seven figures, the company will also be auctioning off a 1970 Hemi ‘Cuda convertible that could sell for over $3 million. Mecum sold a 1971 Hemi ‘Cuda convertible last year for $3.5 million, setting a record.
The hottest cars among buyers right now are the Plymouth and Dodge products of the late 1960s and early 1970s, such as the Chargers and Challengers along with the Daytonas and Superbirds, Magers said. The 1969 and 1970 Mustangs are also in high demand, he said.
Still, muscle-car prices haven’t kept pace with the price growth of some of the elite European sports cars, like Ferraris, Porsches and Mercedes. According to Hagerty, a collectible-car insurance company, muscle-car prices have only recently surpassed their 2007-08 peak, and prices are up a modestly this year, increasing slightly more than inflation.
According to Hagerty, while muscle cars have rebounded, “they remain one of the most volatile segments of the market.”
The cars that are the worst performers are models from the 1950s and cars with poor documentation or uncertain histories.
“Provenance, miles and condition all make a difference on these cars, ” Magers said.
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