SA Classic car market

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IndianaJones
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Location: Citrusdal, RSA

SA Classic car market

Post by IndianaJones » Thu 28 Apr 2016, 11:03

I know this has been discussed a thousand times, and please excuse me for having to blow off some steam again.
But when did all old cars, suddenly reach collector status, which automatically equates to it being worth hundreds and thousands of Rands?
Why are so much classic cars, collector cars, and just plain any old used cars so expensive in SA?

OK, to be fair, I don’t mean all advertised classic cars, there are some really good purchases out there, some really rare and special cars in the SA marketplace, worth every cent of their asking price, but they definitely are in the minority.

It’s just oftentimes I browse overseas motoring websites, and find it great that over there, a huge range in the selling prices of new cars and classic cars, and/or used cars, and between models of classic/used car, exists in those markets. In those markets, it is possible to find forgotten cars or underrated cars for good value. Some cars lose their appeal, some regain it. Trading prices go up and down. Demand for a model increase or taper off.
But this does not seem to happen in SA, the Rand values at least, don’t ever come down.
Why is this? Are there so few classic cars in the country, that all of them are sought after, all the time, no matter the model?

OK, why do I say it’s expensive?
Except for the unfavorable exchange rate, for me the main problem lies with when you compare classic car pricing to new car prices.
Non-classic, regular used cars follow the same trend, in that quite frequently an older used car, are trading for way more than what an insurance company value them at, or a main dealer will offer, or what you expect them to trade for when compared to comparable other models. When insurance companies and others determine a value, they factor in depreciation, but apparently the used car market in a lot of cases does not, or not enough. It is most notable in cars older than say 7 or 10 years, and still too young to be considered classics.

OK, so overseas readers may not see it in a similar light, as you are likely buying with a favorable currency, and that makes SA just full of potential purchases. I fully understand this, had the Rand been equal to a US Dollar, we certainly would have seen much more imports to SA.

But for the SA citizen, earning in Rands, it is a completely different story.

Time for an example, I found a C4 Corvette online in SA, seller wants R285000 for it.
Which almost sound reasonable, when compared to the asking prices of 60’s and 70’s muscle cars I’ve recently spotted, and even supposedly lower price bracket cars, like Camaro’s/Trans Am’s from the same period (the 90’s). But the example in question was not a limited edition Corvette, it’s not a Lotus-massaged ZR1, some might say it’s a future classic, but still it is a LHD, 20 year old LT1 car, and as far as Corvette models go, not exactly scarce in SA.
In its country of origin, C4’s are currently deemed underrated, $8000 is probably an average asking price, but search and good examples could be had for $5000, that is R72500 using an exchange rate of R14,50, double the exchange rate and it is roughly R145000.

Let’s compare these numbers, to the prices of basic new cars in the different countries.
A basic new 2016 Chevy Spark in USA starts at around $12170, which would make a $5000 Corvette less than half the price. Even at $8000, it would be less than the Spark.
In SA, a basic new 2016 Chevy Spark starts at R132000, that makes a R285000 Corvette more than double the price.
Don’t get me wrong, I love this C4, I would like to own it. But in the USA this would have been affordable and many could realize the dream of owning a muscle car, at R145000 in SA it would still be achievable, but at R285000, at least for me, it is not.
Put it another way, would an overseas buyer buy it for $19600(+- R285000), excluding shipping and taxes?
That is just one example of this phenomenon and are in no way limited to this car, it seems to be an average for the SA market.

How is this possible? What causes this? Is this such a thriving market? Is the SA marketplace so different from overseas markets, that it doesn’t follow the same rules? Is it unfair of me to compare the SA market to an overseas market?
Or are there just so many buyers, so eager and willing to part with their cash? Or are the average SA buyer not informed enough?

Does all sellers think their cars will be exported?
I’ve got news for them, not all classic cars are in demand, not all classic cars are valuable, perhaps ever, or at least, at the same time. Yes, some cars for whatever reason, are in demand overseas currently and the foreseeable future, cars like the Fairmont GT, small 2door English Fords, Split window Kombi’s, etc. but there are a huge number of other classics, that were only ever favored in the SA market, or have not appreciated in the overseas markets, or there is a steady supply left in their home markets, etc, etc, and thus it’s not financially viable to export them, why then do most sellers think their cars’ are worth a gazillion Rands? …Because they get away with it?
Or do I have this completely wrong, and it’s the lower end of the price scale cars in the SA market that haven’t fully adjusted to world trends?

Please give me some insight. Is it a bubble that is about to burst? Or will the average South African stay uninformed? I fully understand that buying classic cars is almost always an emotional purchase, and thus it’s difficult to estimate the value of such a car (willing buyer, willing seller and all that), but can we, members of this forum, at least try, and speak up when pricing isn’t fair? Or is it a useless notion, and eventually prohibiting fellow forum members from acquiring good classic cars?
The other question would be, if you agree with my assumptions, how does one change the perception of the market? Obviously SA homologation specials or other cars special to the South African market for whatever reason, would be excluded from it, but would it be fair to suggest the value of said car, should be in some way relative to the value suggested by Hagerty or NAPA or some other overseas valuation guide?

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barrydorr
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Re: SA Classic car market

Post by barrydorr » Thu 28 Apr 2016, 13:46

The good old "what is it worth" discussion...lol...

On your C4 example...how many C4 are in the USA and how many C4 are in South Africa....supply and demand.
I agree though with you that some prices are a bit too high or too low as well... what would the correct value be in SA for a C4?? How much would it cost to import a C4 out of USA?

Correct value is difficult I guess just look at some of these auctions overseas when two guys get in a bidding war over a car and pay way more than that it is valued at.

Just an other example: Look at my Manta...I find it very much under appreciated and undervalued in South Africa when I see prices in the Netherlands, Germany and the UK. ( and there are even more Manta's available there) Also if I compare my Manta to some other classics cars in SA for the same size and year which go for higher (asking) prices.

Then I like you example of new car prices compared to classic car prices... because i have been thinking about this a lot too...because even their prices are getting crazy...just look at the prices of a range rover...nice car...but too me not 1 million rand nice... You car have a plot full of nice classic cars for that money which i would rather do with that kind of money! :mrgreen:
My Toys:
1974 Opel Manta 1900 DL
2008 Mitsubishi Outlander

1972 Toyota Corona MKII 1600 - Bakkie (SOLD)
1991 Opel Kadett GSi 2lt-16V Superboss (SOLD)

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Johann65
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Re: SA Classic car market

Post by Johann65 » Thu 28 Apr 2016, 16:24

Well spoken!
My Opel is worth more to me than the new generation cars that cost R3000 plus or a C180 Merc R30,000 to service!
German parts are highly interchangeable :D And I cannot afford a new car!! :mrgreen:
Member No: 209
Ah! Yes I remember it well! (Only GM's!)
1966 Opel Rekord L CLASSIC SEDAN Current Project

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Burnthosetyres
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Re: SA Classic car market

Post by Burnthosetyres » Thu 28 Apr 2016, 18:00

When it comes to new car prices, it's not just the exchange rate of poor value of the rand, huge duties imposed by government to support the Nkandla Fund!!
'A Camaro is a little animal that eats Mustangs!'

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IndianaJones
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Re: SA Classic car market

Post by IndianaJones » Thu 28 Apr 2016, 18:12

No, not a “what is it worth” discussion, a “why does most sellers think their cars are worth a gazillion Rands” discussion.

Do not fixate on C4’s, I was trying to illustrate a model of car which is undervalued in it’s home country, yet it doesn’t factor through to SA, and the fact that it gets to the point of being undervalued, which I don’t see here in any model.

A car sold in a bidding war, does not equate to it being the market average, or it sold for a fair/repeatable price.

But I’m not trying to determine the exact correct value here of specific models, or the market average, that can be suggested in a separate thread, just trying to figure out why the prices are so high.

A lot of sellers has stated that they factor in the hit they will take, in their advertisements, for when a buyer gives them a lowball offer. But for the average buyer, there is no way of knowing, what similar models actually sell for, are buyers just adopt the practice and cut asking prices in half?

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barrydorr
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Re: SA Classic car market

Post by barrydorr » Thu 28 Apr 2016, 19:55

IndianaJones wrote:No, not a “what is it worth” discussion, a “why does most sellers think their cars are worth a gazillion Rands” discussion.
I hear you...It was just a joke...

I think all the car shows on TV contribute to the problem.
Then also the economy in SA is upto kak and people are in need of money and may think the old park in the back of the yard may help them out of their financial drama's.
Then you have emotional Value, a car with emotional value is much more worth to that particular person and to someone else.
Then you have the "over spenders" who would trow 100.000 rand to build a car which has a market value of half of that and expecting to get their money back.
Then you have the "changers" you will try anything to sqeeze as much as possible money out of the buyer
And last but not least the "scammers"
IndianaJones wrote:
Do not fixate on C4’s, I was trying to illustrate a model of car which is undervalued in it’s home country, yet it doesn’t factor through to SA, and the fact that it gets to the point of being undervalued, which I don’t see here in any model.
I feel my Manta is undervalued compare to overseas prices :(
IndianaJones wrote: are buyers just adopt the practice and cut asking prices in half?
good point...maybe again have seen too much of shows TV ?
My Toys:
1974 Opel Manta 1900 DL
2008 Mitsubishi Outlander

1972 Toyota Corona MKII 1600 - Bakkie (SOLD)
1991 Opel Kadett GSi 2lt-16V Superboss (SOLD)

Gunter
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Location: Cape Town

Re: SA Classic car market

Post by Gunter » Thu 28 Apr 2016, 21:36

i agree Indy....crazy ads i see on gumtree, old valiants is now mopar hemis, firenza tail light is cam an tail lights... ...people sell normal 'run of the mill' well used parts and ask stupid prices - o yes, and ford 302s and 351s are ALL mustang...or from a mustang motor :D
RACECAR spelt backwards spells RACECAR.....

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Johann65
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Re: SA Classic car market

Post by Johann65 » Thu 28 Apr 2016, 21:49

Gunter wrote:i agree Indy....crazy ads i see on gumtree, old valiants is now mopar hemis, firenza tail light is cam an tail lights... ...people sell normal 'run of the mill' well used parts and ask stupid prices - o yes, and ford 302s and 351s are ALL mustang...or from a mustang motor :D
Hullo Gunter,
The Opel Kadett Caravan that you purchased is a good example!
Two weeks ago at the President mall, a similar 64 model was up for sale R40k! take it or leave it!! 8)
Member No: 209
Ah! Yes I remember it well! (Only GM's!)
1966 Opel Rekord L CLASSIC SEDAN Current Project

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pietpetoors
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Re: SA Classic car market

Post by pietpetoors » Fri 29 Apr 2016, 09:10

The price you see on Gumtree is not the price the seller always get.
There are some of those crazy priced non classic cars I've been watching for about 6 months and they are still there.
Think the guys are optimistic, advertise for a crazy price and hope somebody will come along and buy it.

Agree with what was already been said, due to sentimental value, different cars have different values to different people.

Must also mention, if you look at the cost of fixing even a simple car like my Constantia it can also explain the high prices.
Everything old is expensive and hard to find. So if you can find a simple oldish non classic car in perfect condition, chances are good that just labour and spares in getting it in that condition is already worth at least R100k. Something the seller will probably never get back because he over spent, but something you will have to spend even if you get the car for free and have to fix it properly.
Only Dead Fish Go With The Flow!

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Chev58
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Location: Durbanville

Re: SA Classic car market

Post by Chev58 » Fri 29 Apr 2016, 10:22

Now this s an interesting topic !!!
Restorations are expensive, very expensive - but what some perceive as a restoration is also highly debatable/suspect.
58 Chevy Apache

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