The fallout from the credit crunch and housing market turmoil has reached the garages of classic car collectors. The value of some vehicles has declined by a third from two years ago.
Over the last decade, rising home values helped many Baby Boomers recapture their youth by buying American muscle cars and hot rods that were popular from the late '50s to the early '70s.
"Home equity was the ATM out of which a lot of people were withdrawing money to have fun," says McKeel Hagerty, CEO of Hagerty Insurance Agency, which specializes in classic cars. "What the credit crunch has affected is the bottom part of the market."
Ford Mustangs, Chevrolet Bel Airs and similar mass-market vehicles occupy what the collector-car industry calls the "enthusiast car" segment, with typical auction prices between $30,000 and $50,000. These cars are typically bought by casual owners rather than serious collectors.
"Many of these cars were built or bought using home equity loans," says Art Spinella, president of CNW Research, a Bandon, Ore. market analysis company.
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