The Pandemic Spending Spree and the Decline of Classic Car Values

Introduction

The COVID-19 pandemic reshaped much of the global economy, and one notably affected sector was the classic car market. In the midst of lockdowns and social distancing, people found themselves with disposable income but limited avenues for spending. As a result, prices for luxury items, including classic cars, skyrocketed. However, as the world navigates ongoing geopolitical instability and economic uncertainty, the classic car market is seeing a return to ‘normal’ price levels.

A Surge in Demand

During the pandemic, as many turned to online marketplaces for shopping, luxury goods became highly sought after. Collectors and enthusiasts alike began to bid fervently, often driving prices beyond previously established thresholds. Classic cars were no exception. The desire to own a tangible piece of automotive history led to surging bids at auction houses, pushing prices to unprecedented highs.

Consider the case of luxury watches, such as Rolexes and Audemars Piguet. For many, merely acquiring one required years of waiting, as flippers exploited the demand, turning hefty profits in the grey market. This frenzy didn’t just limit itself to watches; it spilled into the classic car domain, where limited edition Ferraris or Lamborghinis commanded millions.

Collector’s Paradise

The classic car market thrived amid this spending spree. Collectors were willing to invest substantial sums—often millions—over their pre-pandemic valuations. The allure of securing a rare vehicle became a status symbol and a potential investment, fueling a bidding war at auctions. Many classic car enthusiasts felt a sense of urgency, frantically securing rare finds that might not be available in the future.

For example, a 1959 Ferrari 250 GT LWB California Spider Competizione—one of just eight aluminum-bodied models—was a prime target for high rollers. Back in 2007, it sold for $4.95 million, but its value soared through the years, eventually fetching nearly $18 million at a New York auction in 2017.

Reality Check: The Market Shifts

Fast forward to 2025, and the market has registered significant changes. The same Ferrari, described as “arguably the most significant in existence,” changed hands for a mere $9.47 million at a recent auction. This hefty drop of 47% from its previous high is a dramatic indication that inflated prices from the pandemic era are receding to pre-boom levels.

Rick Carey, an industry expert, noted that the current market landscape indicates prices have returned to a sense of normalcy. “Top dollar,” he stated, now means something far less than what it did just a few years ago. This shift reflects broader economic concerns, leaving potential buyers cautious and reluctant to spend extravagantly.

The Influence of Economics

The broader economic environment plays a substantial role in the fluctuating values of classic cars. With ongoing geopolitical unrest and fluctuations in global markets, many individuals find themselves hesitating to invest heavily in high-value assets. What was once a fevered race to secure a classic car has turned into a more measured and cautious approach to purchasing.

In fact, Hagerty’s Market Rating, which assesses classic car values, currently sits at its lowest since the pandemic began. The percentage of cars changing hands for prices above their insured value has significantly decreased, demonstrating the cautious mentality of buyers today.

The Impact on Values

Lower-priced classic cars are also feeling this downward pressure. The once-thriving market has shown signs of weakening, with shares of insured values now less favorable than in recent years. As buyers become more mindful of their spending, price drops have become increasingly common across various segments of the market.

This cautious approach reflects a couple of key factors: consumers are no longer willing to pay inflated prices, and many—especially in the U.S.—are preoccupied with the potential economic fallout from domestic and international policies. The last thing collectors want is to overpay for a luxury item that suddenly loses value.

Looking Ahead

With these economic realities, the classic car industry may continue to grapple with a new normal. While rare and iconic models will still command high values, the peak days of pandemic-era prices may remain behind us. Buyers and collectors alike are adapting to the realities of a changing marketplace, reflecting a landscape that is much more grounded than it was during the height of the pandemic spending spree.

Investors may need to assess their collections differently, weighing not just the emotional appeal of these cars but also their potential investment value in a more uncertain economic climate. In this evolving story, classic car enthusiasts and collectors must navigate a marketplace characterized by a blend of nostalgia and realism.