Classic Cars Help Fuel Local Auto Economy
Classic Cars Help Fuel Local Auto Economy
By Beth Milligan
While the U.S. economy continues to recover from the crippling effects of the 2007-2009 global recession, 2013 has been an economic bright spot for at least one industry: the automotive market.
National automakers saw new car sales jump 17 percent to 1.5 million in August-the highest level since 2007. But consumers aren’t just getting revved up about regular-use vehicles; they’re also making room in the garage for classic and collector cars.
That’s welcome news for local repair shops, car restorers, custom painters, decal artists, engine rebuilders, fabricators, transport companies and parts suppliers, all of whom are enjoying an unexpected boost from the revived hobby market.
Glen Gordon, owner of Lakeside Automotive in Traverse City, estimates 20 to 30 percent of his business comes from collector vehicles. In 2009, at the height of the recession, that customer base abruptly plummeted overnight, as struggling owners either sold off their cars or kept them locked in storage.
"That first year, nobody took their cars out," Gordon said. "People were worried. The vehicles just sat there."
Gordon adjusted for the market drop by increasing the number of regular-use vehicle jobs the shop accepted. But from 2010 to 2013, as consumers regained economic confidence, he began to see an uptick not only in classic car repairs and upkeep from returning customers but a significant surge in new collector purchases-particularly 1980s and 1990s Porsches, Corvettes and other modern classics.
"People have an interest in vehicles from the time period they grew up in," Gordon said. "My customers used to primarily be Detroit auto industry retirees who moved up here and had antiques. But now I’m seeing a lot of younger people in their 30s and 40s who are interested in the newer cars. The economy’s better, and they think maybe this is now a good time to jump in."
Walt McAnallen, owner of Hastings Street Collison in Traverse City, has also seen a local increase in younger enthusiasts. While the shop owner has an appreciation for the older classic cars, he says the newer collectible vehicles are easier to find parts for and less labor-intensive to operate on-thus, more profitable.
"You can spend 300 to 500 hours getting a job right on a 1950s car," McAnallen said. "You’re getting into hand-building, looking up duplicate paint codes, finding parts, getting the fit right. With newer cars, the process is simplified."
Where local auto detailers and body shops are seeing the greatest boost from the collector car segment, he adds, are in aftermarket custom jobs-souped-up rides in the vein of the film "Fast and the Furious"-and classic reproductions (also called clones, replicas or kit cars), in which owners spends tens or hundreds of thousands of dollars building a vehicle to precisely mimic a valuable model – say, a Ford Shelby Cobra.
Unlike in warm-weather states, seasonality also has an impact on the northern Michigan classic car scene. With many Traverse City retirees-a core base of collector car owners-splitting their time between Michigan and Florida or Arizona, McAnallen and other shop owners tend to see an increase in classic repairs and tune-ups in the summer and a decline in the winter, when owners either put their vehicles in storage for the season or trailer them south.
But in spite of those seasonal fluctuations, McAnallen, Gordon and other local mechanics say the collector car market has come a long way since its recession-era low-and seems poised to continue growing.
Traverse City-based Hagerty Insurance, which currently insures almost 900,000 collector vehicles across the country (150,000 more than just two years ago), also confirms the classic market has rebounded dramatically.
"While classic car owners were certainly not immune from the recession, we never witnessed mass panic-selling of cars," said Jonathan Klinger, public relations manager at Hagerty. "Many owners who took a break on restoration projects during the recession are now actively restoring their cars again."
Klinger also points to figures compiled by Hagerty reflecting the swelling value of classics over the past five years. The company publishes the Hagerty Price Guide three times a year, which uses seven primary indices to measure the health of the collector car market. In the newest edition of the guide, published in September, the company asserted that market data showed "the most expensive and desirable cars in the… hobby have reached unprecedented highs," with five of the seven indices increasing in value and four establishing new high-water marks.
"We continue to see strength at the top of the market," said McKeel Hagerty, president and CEO of Hagerty. "There is a growing group of capable collectors chasing a limited supply of great cars… it is clear that we have not yet found the upper limit for values."
Which means classic car repairs, tune-ups, rebuilds and custom jobs are also likely to continue climbing-which is "great for local restoration shops," Klinger said.