TCG Stories

 A few nights ago, I went to check out an old Honda VF500 Interceptor motorcycle. This was not a serious excursion - more an excuse to get the kids out of the house on a rainy day than anything else - but I've had the idea of buying a cheap 80s sportbike as a catalyst for getting my motorcycle license. 

The VF500 was pretty tired. Didn't run (well, it did, but it couldn't run because the carbs leaked.) The cosmetics were rough. Overall, a project bike that wasn't worth much more than $500 and the seller was firm at $1,150. What was more compelling was the Jeep Wrangler Renegade sitting in the driveway that he had recently acquired from a customer. 

The Renegade was an appearance package sold in limited quantities. That's rare enough, and the factory body kit was in excellent shape. What truly set this YJ-series Wrangler apart was the cardinal red interior. I have never seen a red interior in a Wrangler, and this one was in astounding condition. So, the first thought that pops into my head is: should I buy it? It's a unicorn I can likely sell for a fair price even after I've shelled out real cash to get it. The second thought is, do I want to go through the steps of reconditioning it so it's ready for sale and can drive that maximum sale price? 

Short answer: well, no. Perhaps I'm not enough of a risk taker but I have a hard time getting excited about a flip vehicle when I am not already looking for said vehicle. The reason I bought the Dakota R/T was that I both wanted to experience sport truck ownership and felt like it could drive a good price when it came time to sell. While I love the YJ Wrangler, I don't pine to own one. 

Therefore, someone else will have the chance to experience this incredible survivor Renegade first-hand. Don't worry, I told the owner it's only worth $15,000, so it shouldn't cost too much to buy it from him. 

While we have all come to know and love Hagerty for the way it looks after collector car owners, there's more to the story than just agreed-value policies for quirky hobby cars. In fact, a recent article from Seeking Alpha, a blog that provides insights on the good, bad, and ugly of publicly traded companies, profiled Hagerty and declared the following: 

"For more than a decade, Hagerty has grown at three times the rate of the overall auto insurance industry, fueled by high retention rates (90%+), effective marketing (more on that later), and the partnerships described above. What is not obvious when first studying the company is that existing partnerships tend to be a source of ongoing growth."

We've often said here at The Common Gear that the market of collector cars and owners is far larger than most pundits give it credit for being. The author of the article agrees, noting the following: "Hagerty estimates that there are over 43M registered classic and collectible cars. That number grows each year as new collector cars (McClaren, Ferrari, etc.) are produced and other cars “age into” the category (25 years old or more). Hagerty currently has ~2M cars insured, so there is a long runway for growth."

That's why the services that support the collector car market go well beyond just mechanics and body shops. Hagerty is obviously well aware of the fact that vintage and classic cars need insuring, but the company is also investing in other avenues to shore up its support of those customers. What's lacking is a seamless way to track the data and reporting that owners are providing independent of Hagerty's involvement, and often via channels that are disparate and heavily silo'd. 

The Common Gear gives insurers and owners a centralized place to meet and exchange the data that powers the policies Hagerty writes. With the projected growth of the collector car market indicating plenty of maturity ahead, organizations like Hagerty and TCG can grow together for years to come. 

In 2020, Hagerty produced a compelling article about the size of the collector car market in the United States. In this piece titled, "The collector car market is bigger than you think," the author points out that at the time of publication, there were some 31 million collector-grade vehicles in the U.S. 

The data calculation was a little messy, with Hagerty reaching into its own database of customers along with "boiling the ocean" in terms of how many cars and trucks total were on the road. Then, they broke down what constituted a "collector" car that extended the goalposts to allow for late-model entries belonging to the post-boomer contingent. 

What's most intriguing about this report is not necessarily the numbers (though they are impressive) but more what it represents which is how many people have a second car squirreled away that counts as the "collector" or "hobby" car. While we can go several days without seeing a single interesting car in traffic, the reality is there are millions of enthusiast-grade vehicles hiding in driveways and storage units, waiting for the weekend or a complete revival.

For The Common Gear, this represents a tremendous batch of potential customers who need to take steps now to protect their investment and digitize the valuable records that capture every improvement necessary to justify both a higher insured value and stronger sale price, when the time comes.  

The collector car insurance landscape is often summed up in one word: Hagerty. We tend to assume that the provider with the biggest media buys and splashiest presence at marquee car shows and auctions is the only game in town, but there are actually quite a few agencies to choose from that provide what we refer to as collector car insurance. 

While the benefits of working with such an outfit are numerous, the most obvious one is being able to access what we call assigned value coverage. In other words, you - the customer - have some control over the valuation, and can oftentimes tell the insurance carrier what you believe the vehicle to be worth based on both market dynamics and your own investment into the car or truck you're insuring. 

I use Hagerty and JC Taylor for my vehicles, but there's also American Collectors Insurance, Heacock, Chubb, Condon Skelly, and more. Here's what you may not know: NSM Insurance owns all but one of those companies, including JC Taylor (Chubb remains the largest publicly-trade insurance company). You might even say they're a bigger deal than Hagerty, with one distinct edge going to the company that recently went public and bought Broadarrow Group: Hagerty is focused on what's next customer-wise, while NSM seems content to service a boomer audience that is quickly aging out of the hobby. 

While Hagerty may be edging closer to catering to the upper end of the hobby, there's no denying they have found a niche and exploited it; the question is whether groups like NSM will find a way to catch up. 

Despite the economy rebounding slowly or not at all, in-person automotive auctions have come roaring back to life with a vengeance. The collector car market is behaving in ways that are somewhat surprising, with classic muscle cars like the iconic Plymouth Superbird still pulling down very strong money when rolling across the block. 

The recent Mecum auction in Las Vegas crushed yet another record, realizing almost $28 million in total sales. Top results went to predominantly late-model sports and muscle cars, with a 2021 Mercedes-Benz AMG GT Black Series leading the way at $462,000. The Ford GT continues to demonstrate why buying one 10 years ago was a very smart move, and perhaps the most surprising result is three restomods that all came close to reaching $300,000. A '67 Ford Mustang, '54 Buick Century, and '39 GMC fire truck were all show stoppers and show that muscle cars and trucks are still capable of bringing big money if they've been modernized to offer more appeal to younger buyers. 

This era of car collecting is like the rest of the world at the moment: unpredictable. But it goes to show you that unlike your 401(k), desirable hobby cars are only going higher. 

While the pandemic put a roadblock in front of in-person auctions at venues hosted by the likes of Mecum and Barrett Jackson, it appears to have subsided and even given way to a new in-person player. Broad Arrow Group was acquired by Hagerty not long after its debut, and is now promoting a major live auction happening in Palm Beach, Florida. 

This raises an interesting question: despite the gangbusters success of the likes of Bring A Trailer and Cars & Bids, do members of the high-end collector class still prefer a packed auction house with a gorgeous backdrop and free wine and cheese? That will take further analysis, but with a new player like Broad Arrow (and partner/investor Hagerty) splurging on a massive in-person auction, it likely indicates there's data somewhere that points to car enthusiasts not moving entirely to digital auction formats outside of another pandemic. 

In-person auctions do take some of the guesswork out of car purchase with the added bonus of seeing friends or spotting another car you want to take home after yours sells. It's one-stop shopping if you place an emphasis on relationships. How often do you keep in touch with the seller of a Bring A Trailer car versus a broker you've seen at every Mecum auction for 10 years and routinely horse trade with? 

Both digital and in-person formats will co-exist happily for the foreseeable future, but it's fascinating to see the live auction format rebound after staring down both a pandemic and the arrival of two explosive digital competitors. 

I couldn't help but comment on this recent auction on Cars and Bids for a 2002 Audi S8. Gorgeous car, one-owner, and maintained by a dealer in Greenwich, Connecticut, that absolutely charges every one of its blue-blooded customers way too much for services they don't really need. 

The seller was cavalier at best, clearly a non-enthusiast who happened to buy a performance car. Despite potential buyers inquiring more than a few times, he paid little regard to the fact that the records existed at the dealership, but he didn't bother to provide them in time for the listing. 

When a car has a demanding maintenance schedule and a propensity for costly repairs when neglect sets in, showing that you're the type of owner who doesn't skimp on the repairs puts buyers at ease and makes for an eyes-wide-open experience. 

The seller did fine on the sale price but likely left a few grand on the table considering the strong cosmetics and single-owner history. 

See more here at Cars and Bids: https://carsandbids.com/auctions/3pAoQvbY/2002-audi-s8

A few years ago, I caught wind of a largely air-cooled VW car show that happened each year in one of my favorite places: Pass-a-Grille Beach, Florida. Pass-a-Grille is a tiny village at the end of St. Pete Beach, and by Florida standards, it's old (which means, not very). I loved the premise of a car show like this happening a few feet from the Gulf of Mexico and sandy beaches, not to mention ample bars and restaurants nearby. 

The show was seemingly a volunteer-driven operation, albeit just one volunteer: a woman named Amanda who had run it for a few years after gradually being given more responsibility by a gentleman that apparently organized a casual get-together years earlier. I noticed Amanda cancelled one show due to health reasons; then it was waylaid by COVID; and then finally, it just seemed to go away. I got in touch and asked what the deal was, and she basically said she was done running it. I asked if I could take it over, to which Amanda said, "Sure." 

Telling a long story short, I began working on the show in earnest in April. Permitting, city approval, artwork, t-shirts, sponsorships - it all was a mad dash using time I barely had. But it was a great opportunity for The Common Gear to sponsor an event that ended up having 100 registered attendees and over 90 cars packed into two streets in one of the prettiest spots in Florida. 

There were some complaints - always are - but nothing more than bickering over which cars got an award. The list of improvements for next year is blessedly short, but it's safe to say we'll be back. 

After getting the Audi S6 off the island and home, it reminded me of another car on Martha's Vineyard I had forgotten about. 

A few years ago, I was asked to assess a rusty Chrysler New Yorker for a woman whose family owned a house on Chappaquiddick. She felt like it was worth some money; it really wasn't, especially since it involved two ferry passages to get it on the mainland. The property featured a main house, guest house, in-ground salt water pool, and a four stall garage.

In the garage was white Jeep Grand Wagoneer (classic Vineyard vehicle); a 1999 Wrangler with under 22,000 miles; and a BMW Z3 M-Roadster with a moldy interior and expired registration. Of course, the M caught my eye and I made an inquiry about; I was quickly rebuffed. The New Yorker got zero interest and the owner asked me to pull the ad. 

After the S6 got home, I reached out to the caretaker that met me at the property two years ago. He said the property was in foreclosure and that the cars were removed. I then texted the owner and surprisingly, she responded. The car was sold to someone on the main land who wanted a project, and I bet she sold it for next to nothing as a non-runner that had to be towed from an island off an island. 

New rule: six months between outreach to owners of interesting cars, and not a day more.  

While there has been endless chatter about the many ways Bring A Trailer is smashing auction sales records, the traditional in-person events have also been ripping right along. Although there were significant dips at the height of the pandemic, those drops were clearly just moments in time. 

Mecum's annual Dallas auction recently delivered compelling results, recording over $55 million in sales and a sell-through rate of 84 percent. Not surprisingly, the Ford GT continues to be a ridiculously hot seller, making anyone who bought one of these when they were a year or two old look very smart at this point. A low-mileage Heritage edition pulled an incredible $704,000, followed by two additional examples that also saw strong money.

One of the curveballs I didn't expect to see was a very hot market for old-school Mopars. All the talk about baby boomers fading out of the hobby and causing a death-spiral in values seems to be just a bunch of hot air, with a 1969 Daytona nabbing $418,000 and a 1970 Superbird netting just under $325,000. Even a Bel Air bubble top left the auction block with a sale price of $280,500. 

While the mortals worry about a recession, high roller seemingly have no qualms putting money into the collector car marketplace.