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Up to $400 million worth of classic cars will roll across the auction block in Monterey and Pebble Beach this week, marking the biggest test of the year for the collectible car market and wealthy owners.

An estimated 1,140 classic cars will come up for sale at Monterey Car Week, the annual gathering of classic car collectors from around the world. The sales total is estimated to come in between $367 million and $409 million, according to Hagerty. The midpoint of that range, at $388 million, would mark the third year of declines in sales, and an 18% drop from the recent peak of $471 million in 2022.

The high end of the market is the weakest. The Monterey auctions – held by RM Sotheby’s, Gooding & Co., Mecum, Bonhams and others – have traditionally featured at least a half-dozen cars priced at $10 million or more. This year there’s only one – the fewest in over a decade. The average sale price has dropped to $473,000 this year from $477,000 last year.

“Pebble Beach is the annual health check on the market,” said Simon Kidston, a classic car advisor and dealer. “Everybody waits to see what happens at Pebble Beach before committing to a major decision the rest of the year.”

Like the art market and other types of collectibles, classic cars have been in slow decline since the pandemic rally in 2021 and 2022. Collectibles prices are down 2.7% over the past 12 months, according to the Knight Frank Luxury Investment Index. Classic car prices are down 0.2% overall – better than the 20% drop in the art market but not as strong as jewelry (up 2.5%) or coins (up 13%).

Classic car dealers and auctioneers blame global uncertainty, with wars in Ukraine and the Middle East, along with weakness in China. Higher interest rates are also a factor, raising the opportunity cost of buying a classic car, since risk-free cash still earns over 4% or more. Some also point to a surging stock market for the past three years, which makes collectibles relatively less attractive.  

Yet experts say the biggest reason for the classic car slowdown is a generational shift. Baby boomers, who have powered the classic car market for decades, are aging out or downsizing. The new generation of millennials and Gen Zers, who are coming into wealth and collecting, want newer and fewer collectible cars. The shift is expected to accelerate as an estimated $100 trillion is passed from older to younger generations, giving fuel to the new breed of collector.

“It’s a big rotation,” said McKeel Hagerty, CEO of Hagerty, the classic car insurance, auction and events company. “Some of the older-guard collectors are framing it, ‘The market is soft at the top end.’ But here’s a lot of depth in this market. It’s just rotating to younger buyers and newer cars.”

That rotation has left the market for 1950s and 1960s cars with oversupply and falling prices. Many baby boomers are trying to clear their garages and sell, while others are passing their cars on to their kids, who often don’t share the same passion.

Gooding & Co. is selling three Ferrari 250 GT California Spiders this week, including the most expensive lot of the week, a 1961 250 GT SWB California Spider with an alloy body and original hardtop estimated at over $20 million. “Cal Spiders,” as they’re known, were made famous in the movie “Ferris Bueller’s Day Off,” have long been a rare and special sighting at auctions. Seeing three at the same auction series is highly unusual.

Kidston said the alloy body Cal Spider would have likely fetched $25 million to $30 million a few years ago.

“It’s one of the great road cars of all time,” he said. “It has intrinsic value, with provenance, sophistication, beauty and usability.”

Prices and demand for many cars that are over 50 years old are down as much as 20% to 30% from the peaks, dealers and brokers say.

“It’s just the question of what clears the market, and can their egos handle it,” Hagerty said. “If it’s an $18 million car, and it becomes a $13 million car, it’s still a multimillion-dollar car, which is pretty amazing.”

Hagerty said that falling prices have driven more sales to the private market, directly between buyer and seller, rather than to the auctions. Sellers with prominent cars don’t want their discounted sales prices to be public, so they opt to sell privately.

“That way nobody has to feel embarrassed,” Hagerty said. “We’re seeing a surprisingly large amount of private sales. Sometimes a car will hit the market and sell in a couple of hours and close by the end of the day.”

At the same time, auctions of newer super cars are skyrocketing. Millennials and Gen Zers are bidding up prices for rare cars from the 1980s, 1990s and 2000s. They also prefer cars that are more affordable and practical. Rather than keeping a $10 million 1962 Ferrari 250 GT SWB Berlinetta locked up in a private Garage Mahal, the new breed wants post-1980s Porsches, BMWs and later-model Ferraris they can enjoy every day and not have to constantly repair.

Along with affordable exotics, young collectors are also paying up for supercars, especially rare and highly specific Paganis, Bugattis and Rufs, the boutique German builder. A 1989 Ruf CTR “Yellowbird” sold in March for a record $6 million at Gooding & Co. at the Amelia Island sales.

Two years ago, the average model year of the cars being sold at Pebble was 1964. This year it’s 1974, which still underestimates the bar-bell distribution of cars from the 1950s at one end and the 1980s and 1990s cars at the other.

Sales of modern supercars — defined as those from 1975 or later – will likely overtake sales of so-called “Enzo-era” Ferraris (made before 1988) at Monterey for the first time, according to Hagerty.

Some experts even worry that the modern supercar segment has become over-inflated and speculative. Like momentum trades in the stock market, which retail investors buy on the basic premise that someone else will buy it for more, modern supercars seem to be rising indiscriminately.

“If it’s all solely reduced to what is more saleable, then collecting becomes very superficial,” Kidston said. “I don’t believe collecting should be ruled by investing. You should keep an eye on the financial implications of what you buy. But it should not be the be-all and end-all. Otherwise it just becomes like bitcoin.”

Here are the top lots from Monterey Car Week, compiled by Hagerty: