Another Month, Another Drop for the Hagerty Market Rating

The classic car market continues to cool, as the mixed results from the Monterey Car Week auctions come to a close. The Hagerty Market Rating dropped 0.12 points this month to 63.38, continuing its slide to its lowest value since Spring 2021. In the past two years, the Market Rating has only seen a month-over-month increase twice.

The Hagerty Market Index, an open-ended stock-market-style version of the Market Rating, also dropped 0.6 points this month its lowest value in two-and-a-half years. The Hagerty Market Index has been in free-fall since its peak in late 2022, experiencing a 12 percent drop in that time.

Last week's Monterey auction results will hit the Market Rating next month, so its massive quantity of 7-figure cars will not provide any relief to the Market Rating's Auction Median Price metric, which has decreased for the 16th consecutive month. This metric now sits at a new all-time low of 31.26, however it's descent is at least slowing. This month's 0.31-point drop is the smallest decrease this metric has seen during its current losing streak. Perhaps next month we will see the the Auction Median Price metric rise for the first time since Spring 2023, when over 80 million-dollar-plus sales from Monterey hit the Market Rating's books.

Despite the large quantity of million-dollar sales, this segment actually performed quite poorly at the Monterey auctions. Over the past three years at Monterey, 71 percent of seven-figure cars sold. However, this year the sell-through-rate was only 57 percent. Pre-1974 million-dollar-plus Ferraris, the bread and butter of the August auctions, had a sell-through rate of only 51 percent (these cars averaged 84 percent during the three prior Monterey actions). For more information, checkout our Monterey coverage here.

At a macro-level, the high end of the market isn't looking its healthiest. The ratio of insured value increases-to-decreases for cars valued over $250,000 has fallen for the ninth consecutive month, to it's lowest point since May 2021. Meanwhile, this ratio for less expensive vehicles has grown seven months in a row.

Our industry experts predicted a weaker-than-normal Monterey, and they were right, citing a faltering stock market and an upcoming election season that tends to cause people to be more cautious with their money. But they aren't seeing a "contracting market." Instead, they see one that is taking a breather from the exuberant pandemic-era spending. The power has shifted from the seller to the buyer, which is welcome news for enthusiasts.

Next month, we will see the how a slower than expected Monterey impacts the Hagerty Market Rating. Spoiler: expect the Rating to fall again.

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