Building on a recent post on vintage guitars, I thought it would be fun to compare two similar markets: classic cars and guitars. The two go hand in hand, both markets are often driven by the Baby Boomer generation that has found itself with significant disposable income. Despite this similarity, the growth of the two markets is staggeringly different. Based on the 42 Guitar Index, the last 10 years have been relatively stagnant in terms of growth. This compares with 400% growth for Haggerty’s Blue Chip group of cars over the same period.
The biggest difference between the two markets is sheer size. Classic cars regularly sell for over $1m and Bonham’s estimated in 2015, that there were over 5,000 cars for a combined $1.2bn. The market for vintage guitars is much more difficult to estimate, as many trade hands not at auction houses like Bonham’s, but through private channels, and websites like eBay and Craigslist. The more public nature of car sales can only increase interest in the market.
There will be over 30 auctions of classic cars across Europe and the US in 2016, including sales by Bonham’s, RM Sotheby’s, and Gooding & Co. These sales will make headlines – in 2015, 225 cars sold for over $1m. By contrast, the number of guitars that have sold for over $1m can be counted on one hand, and this number includes private sales! Overall, there will likely only be a handful of guitar auctions in 2016, including sales by Heritage Auctions, and a major sale already held in February by Guernsey’s.
One of the biggest reasons for this is simply the available supply of guitars vs classic cars. Most guitar auctions will only feature a handful of guitars that could be said to be ‘blue chip.’ There are simply more classic cars to sell than there are vintage guitars. Vintage guitars were often produced in the hundreds or low thousands a year – though records are dubious – whereas twenty thousand C2 Corvettes were produced in 1963, a number that stayed relatively constant through the 1960’s.
Not only are there more cars than guitars, there are also more drivers than guitarists! Although you don’t have to be a world class guitarist to enjoy a 1954 Stratocaster, it definitely helps. Furthermore, restoring guitars back to pristine condition can be detrimental to their value, so there is a limit to the aesthetic value of vintage guitars. Keith Richards uses his 3,000+ guitars, even though a 1953 Telecaster can command up to $25,000. A classic car however, will be enjoyed, not used. Guitars simply aren’t collected in the same way that cars are. There were only two notable non-playing guitar collectors. Scott Chinery, who envisioned his guitars kept in a museum, but still played by masters, and Akira Tsurama, who sold many of his instruments while in financial distress. Cars are very different, kept in offsite dedicated storage facilities, and maintained in pristine condition for concours d’elegance.
Although both vintage guitars, and classic cars can commend exorbitant prices, the market for classic cars is significantly larger. The size and public nature of the classic car market makes it more enticing for enthusiasts who aren’t experts. Demand in the guitar market is dominated by a subset of musicians who have become collectors, coupled with a limited supply of ‘blue chip’ guitars, naturally limits the market’s growth. However, the common thread in both markets is a core of collectors who are truly passionate about their collections.