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by DON HOLLWAY, Webmeister/Editor
In these somewhat uncertain economic times, everybody’s trying to find the safest place to put their money. Stocks? Bonds? Hard assets? Precious metals? Beans and bullets? For many car enthusiasts, the answer for right now just might be a Porsche 911.
If you’ve been keeping track of vintage 911 prices over the past few years, you’ve noticed values for air-cooled models have gone through the roof. Maybe the peak was an early-80’s, extremely low-mile 930 posted on Craigslist New York a while back for $130,000. (Hint: It’s not listed anymore.)
Assuming the cars have at least stopped depreciating and values really are on the way up, some of this can be put down to mere dollar devaluation. The more of anything there is, the less each individual unit is worth; all those “quantitative easing” dollars out there have lowered the value of each one. According to the government’s own inflation calculator at data.bls.gov, $1 in 1985 would buy $2.21 today, meaning the dollar is worth only 45% of what it was when we were kids. Apples-to-apples prices have more than doubled.
But there’s more to it than that. A quick check on, say, CarGurus.com shows that the average price of a Porsche 911 (models from 1986 forward) has gone up 1.9% in just the last 30 days, 2.39% in the last 90 days, and 7.66% in the last year. This is topped off by the ’89 911, which is now hitting no less than $107,000—a 150% increase in just one year.
The question then becomes whether these are “real” values, or yet another bubble like we’ve seen with muscle cars, Ferraris, subprime loans, real estate, dot-coms....
“First of all, CarGurus.com uses computer algorithms of advertised prices to generate their data, not actual sales,” explains John Witmer of AIC Autos, “so they are actually creating a ‘bubble of optimistic prices’ by using their data in this way. In reality a 2% price increase comes along every spring in the Porsche market, so it’s nothing new. The truth is that this is the first time in history that the anyone with internet or a cell phone is able to voice their unqualified anonymous opinion, and have them viewed as facts. That is the bubble, not the cars’ values.”
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The ’89 911 is now hitting no less than $107,000—a 150% increase over last year.
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“Successful people that couldn’t afford these cars when they were young and the cars were new, are now entering that period of their life where they can well afford them,” says Tom Wanner of Autohaus Lancaster. “Given the limited supply, I feel bullish that values will remain stable and continue to rise, especially on those units of high caliber and solid provenance.”
For now, despite a few questioning voices on internet forums, values seem to be holding. In a video by video by AFTER/DRIVE, Zac Moseley and Mike Prichinello of Classic Car Club Manhattan discuss the 911 market, why the cars are appreciating, and what the future holds. Asked whether 911 values are a bubble about to burst, Moseley says no. “The (911s) that are driving those prices are the ones there will never be more of.... If they don’t make more of them, demand is never going to go down.”
Never say never, though. “Over the past 6-8 months I watched the older air-cooled cars accelerate in value at a pace that represents speculation in profits and not the true owner/collector value of Porsche vehicles,” says Steve Baun of Sun Motor Cars Porsche. “Spending time with car club folks and track guys, this conversation is becoming more common, and with most of these conversations, it’s not about collecting the car, it’s about how much money can they make. With this being said, there will be a time where the market just goes away, similar to the Ferrari example from almost 8-10 years ago. The values fell so fast you could not get out of the cars fast enough. Porsche…a hot stock right now, but when do I sell?”
“Presently, it seems that too many people are spending a lot of time discussing the value of a car versus enjoying it,” agrees Wanner. “A great drive can be a memory to look back on forever. A few dollars are soon forgotten. Buyer and seller should both beware. Some great cars have been sold cheap, and many questionable cars are being overpriced and overbought. That said, if you come across a car you want and feel confident about, go for it. The 911 has been a great investment.”
Viewed merely as a tangible asset rather than a love object (and when talking money, that’s the way you must look at it), the key to the real value of a vintage 911 may simply depend on when it changes hands.
“Air-cooled Porsches have been appreciating quite steadily for many years now,” Witmer says. “We have watched 356 cars double in real value in a 5-year period, followed by early long-hood 911s essentially doing the same. Both of these markets are strong and stable, and are still not at their peak. The later impact-bumper era 911s (’78-’89) have also come in to their own in the past few years. Frankly, one of the main reasons for the seemingly sudden value increase is due to the high inflation these cars experienced in the 80’s. A 1980 911 coupe was a low thirties car, and by 1989 had increased to upper fifties! Of course by 1990 Porsche, and most other European manufacturers, changed from producing essentially hand-built cars to more automated assembly, meanwhile removing a large portion of their middle management teams, reducing their prices to dealers, and reducing dealer margins to achieve a $10,000-less MSRP for the 1990 911! This had a negative effect on the value of the impact-bumper cars for many years, as it made the newer cars the smart buy. Combine this with the recent recovery in the international economic climate where many choose to put their money in hard assets like classic cars, and a very strong euro-to-dollar ratio, and you get Europeans buying up our cars at what’s equivalent to a 30% discount! All of this together makes a perfect storm of legitimate reasons to see such appreciation during the short term.
“But,” Witmer adds, “like many have said, they are not building any more of these, and the impact-bumper cars are still cheap in comparison to the 356 and long-hood 911s.... They still have a way to go!”
The consensus seems to be that if we are in a bubble, it’s at least not ready to pop. If you own an air-cooled 911, sit back in comfort and watch its price rise. And if the worst does happen, the economy collapses and the apocalypse comes to pass, what better way to escape to your bugout bunker than in your classic Porsche?