Classic Cars: The Current World View

The past decade has seen a dramatic increase in the resale values of our classic old Porsches. I see four main factors contributing to this phenomenon: increased globalization, with more sophisticated telecommunications and the continued growth of the internet; an ample supply of money to spend by a world-wide generation of enthusiasts that are passionately involved with their hobby; high demand for relatively few numbers of cars produced; and the weak U.S. Dollar versus the Euro, which has made anything sold in the United States an attractive 20-40% discount to European buyers.

However, as we close out this decade, the ample supply of cheap, easy money has vanished as a result of the world-wide financial crisis. Economic recession is a reality, not only here in the USA, but also in Europe and elsewhere around the world. General Motors and Chrysler have just received a bridge loan from the U.S. government to help keep them solvent. Every automobile manufacturer on the planet is looking at declining sales and difficult times ahead.

A Silver Lining?

Based on the four factors listed in the beginning paragraph, I am optimistic for the long term. First of all, technological progress will continue to improve how we communicate and exchange information on a world-wide basis. Secondly, although the European economy is slowing down as well, the U.S. Dollar will still be weak, relative to the Euro, at least through this year. Thirdly, especially with old Porsches, you have steady, strong demand for a relatively small supply of cars produced. The magic spark in that demand is our unbridled love affair with the automobile and everything associated with it.

So, the only thing that has changed is that the supply of funds has been restricted. Unfortunately, for those of us that were living way beyond our means, it may result in a severe rethink of our lifestyles. Some of us will be forced to spend less on our classic Porsche hobby, or, worse, to get out of it altogether by selling our cars. Based on that reality, I believe that values for our classic cars will soften somewhat for the short term, as people readjust their spending habits and the global financial mess takes a little while to get straightened out.

I also think that there will be a turnover of ownership, with the classic Porsche evolving more up market. I have noticed this trend over the past few years, especially models on the lower end, such as 356C coupes and 912s. In 2000, what would get you a pretty nice, solid, driving car won’t even get you a parts car nowadays. Our cars are no longer a modest hobby we can indulge in for a few thousand dollars. They have evolved from sporty transportation devices into fine art.

Thanks for listening,


William J. Pringle
President, Classic & Speed Parts, Inc.