StarTech Session
What’s happening to Mercedes-Benz values?
Rob Sass, Dave Kinney, Adam Martin Hagerty Insurance
Who better than the collectible-car specialists at Hagerty Insurance to present a seminar at StarTech 2013 on trends in the classic car market as they affect Mercedes-Benz automobiles? The knowledgeable panel included Rob Sass, Hagerty vice president of content, Dave Kinney, Hagerty valuation consultant and member of the American Society of Appraisers, and Adam Martin, vice president of the Hagerty Institute. Here are some of their conclusions and recommendations.
The collectible car marketplace
Using the Hagerty Blue Chip Index, which includes the 300SL Gullwing and Roadster as two of its 24 high-end models, the market took a near 20-percent dip in the uncertain days after the onset of the great recession in 2008, but bottomed in 2010 and now has risen well past its highest previous level. However, the 300SL values never dipped; since 2011, they’ve actually set new records with each auction event.
An index compiled with sales information on collectible Mercedes-Benz cars – including such examples as the 300Sc, 280SL, 450SE and 6.9 – has shown the same pattern as the 300SL, but in fact prices are now increasing at a higher rate. In particular, values of 190SLs sold at auction have increased more than 65 percent in the past 12 months, and repeated examples of sales over $200,000 for “best-in-world” restorations are being noted.
Demographics certainly play a role in the demand for collector cars. The current market is dominated by baby boomers born between 1946 and 1964, with both discretionary income and leisure time to support this hobby. Fortunately, this cohort will continue to be active for at least another 10 to 15 years. However, the X-generation following it is quite small in comparison, so interest in classic cars eventually will have to shift to the millenials born after 1984. There is every indication that will occur. Interest in collectible cars that are older than the baby boomers, such as Model Ts, high-end 1930s models, and Brassies from the early 20th century, continues to grow, so there is no reason to believe that millenials won’t appreciate the classics built before their birth.
What makes a car collectible?
Though the market for museum-grade cars such prewar SLKs and postwar Gullwings has placed these classics out of the reach for all but the wealthiest collectors, the middle market – from 190SLs to 219 Pontons – is still accessible to enthusiasts, as evidenced by an article in the May-June issue of The Star featuring classics priced under $15,000.
Three attributes determine the value of these cars and sets them apart from used cars of the same age: “eventability,” affordability, and ease of ownership.
Eventability refers to cars that are accepted in the growing number of classic-car tours, welcomed at Saturday morning doughnut-and-coffee events taking place all over the country, and appreciated in concours systems like that of the MBCA. These cars are will continue to grow in value, as well as providing owner satisfaction.
Affordability speaks for itself; a car that is too expensive to be purchased and enjoyed by the average enthusiast is not going to be used, but instead is going to be made into an object to be hoarded for its value and rarely if ever even displayed.
Ease of ownership means that a car has to be reasonably easy to maintain and restore. Newer cars with complex electronics, or cars where there is little interest in a model or too few examples remaining to maintain a healthy market in replacement parts, are less desirable. Mercedes-Benz owners can count themselves fortunate that the production company is still very much alive, and also one of the very few that works to make original-spec replacement parts available for older models.
Mercedes-Benz models to consider
Based on trends in classic-car insurance purchase, as well as sales at auction, the Hagerty specialists offered a number of interesting examples of Mercedes-Benz models to consider purchasing or restoring now.
Easily meeting the criteria of eventability, affordability and ease of ownership, the Ponton and Fintail sedans of the 1950s and early 1960s are an obvious entry point for new enthusiasts. These models are showing up at events of all sorts, from local tours to the Peking-to-Paris rally, and are highly practical to own and maintain.
With 190SL prices now moving out of range, the sweet spot in the Mercedes-Benz market is the W113 Pagoda range. Offering roadster fun, classic lines, and ease of maintenance, these are the cars to be buying now before they, too, begin to move out of an affordable price range.
Following right behind them for all the same reasons (and in fact, often mistaken for their elder and more valuable siblings, but at a considerable price advantage) are the R107 SLs. Even the R129 SLs are starting to gather a following.
Several models of less obvious interest are now beginning to move into the limelight because of their relative rarity and high-performance quotient. At the top of this list is the 190e 2.3 16-valve, the car that pushed BMW into producing the M3, but only now is starting to get the same respect.
The 500E/E500, built in very small numbers between 1990 and 1994, is a model to be looking for right now. Built in partnership with Porsche before the AMG alliance, this distinguished sleeper with breathtaking performance can be purchased for $8,500 to $30,000.
The E320 Cabriolet, sold in the United States from 1993 to 1995, was the newest model on the panelists’ list, with the sidenote that this car may eventually spark as much interest as previous cabriolet models, but currently is a rewarding and affordable car to own if a good example can be found.
Advice to classic car clubs
One point clearly made in the presentations: The value of classic cars, as well as the opportunities to use and enjoy them, is inherently dependent on the continuing existence and vitality of car clubs – certainly one reason why Hagerty Insurance is so willing to participate with various clubs in events such as StarTech.
Panelists agreed that clubs should continue to promote interest in the marques they support – it’s all about “events, events, events.” The more opportunities there are to use the cars, the greater the interest will be in owning them.
In particular, events that emphasize driving the cars are important; shows and concours competitions are fine, but owners really need to be driving their cars to appreciate and enjoy them. Finally, emphasis should be placed on doing “fun stuff” – fun in terms that all three of the owner demographics will individually appreciate. Keep the events casual, de-emphasize competition, and just have fun.
For more information on Hagerty Insurance, visit www.hagerty.com
What’s happening to Mercedes-Benz values?
Rob Sass, Dave Kinney, Adam Martin Hagerty Insurance
Who better than the collectible-car specialists at Hagerty Insurance to present a seminar at StarTech 2013 on trends in the classic car market as they affect Mercedes-Benz automobiles? The knowledgeable panel included Rob Sass, Hagerty vice president of content, Dave Kinney, Hagerty valuation consultant and member of the American Society of Appraisers, and Adam Martin, vice president of the Hagerty Institute. Here are some of their conclusions and recommendations.
The collectible car marketplace
Using the Hagerty Blue Chip Index, which includes the 300SL Gullwing and Roadster as two of its 24 high-end models, the market took a near 20-percent dip in the uncertain days after the onset of the great recession in 2008, but bottomed in 2010 and now has risen well past its highest previous level. However, the 300SL values never dipped; since 2011, they’ve actually set new records with each auction event.
An index compiled with sales information on collectible Mercedes-Benz cars – including such examples as the 300Sc, 280SL, 450SE and 6.9 – has shown the same pattern as the 300SL, but in fact prices are now increasing at a higher rate. In particular, values of 190SLs sold at auction have increased more than 65 percent in the past 12 months, and repeated examples of sales over $200,000 for “best-in-world” restorations are being noted.
Demographics certainly play a role in the demand for collector cars. The current market is dominated by baby boomers born between 1946 and 1964, with both discretionary income and leisure time to support this hobby. Fortunately, this cohort will continue to be active for at least another 10 to 15 years. However, the X-generation following it is quite small in comparison, so interest in classic cars eventually will have to shift to the millenials born after 1984. There is every indication that will occur. Interest in collectible cars that are older than the baby boomers, such as Model Ts, high-end 1930s models, and Brassies from the early 20th century, continues to grow, so there is no reason to believe that millenials won’t appreciate the classics built before their birth.
What makes a car collectible?
Though the market for museum-grade cars such prewar SLKs and postwar Gullwings has placed these classics out of the reach for all but the wealthiest collectors, the middle market – from 190SLs to 219 Pontons – is still accessible to enthusiasts, as evidenced by an article in the May-June issue of The Star featuring classics priced under $15,000.
Three attributes determine the value of these cars and sets them apart from used cars of the same age: “eventability,” affordability, and ease of ownership.
Eventability refers to cars that are accepted in the growing number of classic-car tours, welcomed at Saturday morning doughnut-and-coffee events taking place all over the country, and appreciated in concours systems like that of the MBCA. These cars are will continue to grow in value, as well as providing owner satisfaction.
Affordability speaks for itself; a car that is too expensive to be purchased and enjoyed by the average enthusiast is not going to be used, but instead is going to be made into an object to be hoarded for its value and rarely if ever even displayed.
Ease of ownership means that a car has to be reasonably easy to maintain and restore. Newer cars with complex electronics, or cars where there is little interest in a model or too few examples remaining to maintain a healthy market in replacement parts, are less desirable. Mercedes-Benz owners can count themselves fortunate that the production company is still very much alive, and also one of the very few that works to make original-spec replacement parts available for older models.
Mercedes-Benz models to consider
Based on trends in classic-car insurance purchase, as well as sales at auction, the Hagerty specialists offered a number of interesting examples of Mercedes-Benz models to consider purchasing or restoring now.
Easily meeting the criteria of eventability, affordability and ease of ownership, the Ponton and Fintail sedans of the 1950s and early 1960s are an obvious entry point for new enthusiasts. These models are showing up at events of all sorts, from local tours to the Peking-to-Paris rally, and are highly practical to own and maintain.
With 190SL prices now moving out of range, the sweet spot in the Mercedes-Benz market is the W113 Pagoda range. Offering roadster fun, classic lines, and ease of maintenance, these are the cars to be buying now before they, too, begin to move out of an affordable price range.
Following right behind them for all the same reasons (and in fact, often mistaken for their elder and more valuable siblings, but at a considerable price advantage) are the R107 SLs. Even the R129 SLs are starting to gather a following.
Several models of less obvious interest are now beginning to move into the limelight because of their relative rarity and high-performance quotient. At the top of this list is the 190e 2.3 16-valve, the car that pushed BMW into producing the M3, but only now is starting to get the same respect.
The 500E/E500, built in very small numbers between 1990 and 1994, is a model to be looking for right now. Built in partnership with Porsche before the AMG alliance, this distinguished sleeper with breathtaking performance can be purchased for $8,500 to $30,000.
The E320 Cabriolet, sold in the United States from 1993 to 1995, was the newest model on the panelists’ list, with the sidenote that this car may eventually spark as much interest as previous cabriolet models, but currently is a rewarding and affordable car to own if a good example can be found.
Advice to classic car clubs
One point clearly made in the presentations: The value of classic cars, as well as the opportunities to use and enjoy them, is inherently dependent on the continuing existence and vitality of car clubs – certainly one reason why Hagerty Insurance is so willing to participate with various clubs in events such as StarTech.
Panelists agreed that clubs should continue to promote interest in the marques they support – it’s all about “events, events, events.” The more opportunities there are to use the cars, the greater the interest will be in owning them.
In particular, events that emphasize driving the cars are important; shows and concours competitions are fine, but owners really need to be driving their cars to appreciate and enjoy them. Finally, emphasis should be placed on doing “fun stuff” – fun in terms that all three of the owner demographics will individually appreciate. Keep the events casual, de-emphasize competition, and just have fun.
For more information on Hagerty Insurance, visit www.hagerty.com