Why many classics won’t rise in value

Not in the short term at least, and why attrition is the only way most cars will rise in value.

Take the BMW E36 M3. The unloved M3, most likely due to being the successor to the original E30, and predecessor to the E46, a car which has enough power and thrills to keep you forever entertained on the road.

The E36 was also styled somewhat conservatively losing the boxed arches of the original and going without the muscular stance and proportions of the E46.

But not even the E46 was immune to hellish depreciation. The luscious E92 M3 with its big boy V8 engine monstered its way onto the scene making it an irresistible option with second hand prices now Golf GTI money, keeping a lid on those E46 prices.

Most M-car interest lately has centred around the E46 M3 as it hits the sweet spot for power, BMW straight six sound, size, and handling. Prices have been fluctuating but haven’t managed to  skyrocket possibly for a couple of reasons.

Proliferation of M3s (and now M4s) in the market means there’s a lot of stock for buyers to choose from, driving prices down or at least keeping them down. So prices are continuously getting squeezed (crushed?) downward from the top and this makes it very hard for the likes of an E46 M3, let alone an E36 M3 to command more in price.

There’s also the M2 factor. As the M3 morphed into the M4 and was/is genuinely a large car, the M2 was welcomed with open arms as a return to a more approachable and especially for the road, entertaining driving prospect. One look at the classifieds will tell you these things sold in large numbers, again driving prices down. For many, the old M3s don’t compete with the new M2 with its better technology, lower kms, competence and perhaps even a bit of the warranty left. Enter the much lauded M2 Competition and it all starts to look a bit bleak for those older M models. 

Then you’ve got the little bruiser, the 1M. Built in much lower numbers under a skunk works process it truly is special despite its polarising looks and ultimately ability. It’s fricken entertaining to drive and is more of an M car than perhaps any recent M3. 

And that’s just the M cars from BMW. 

Many just want big straight line performance for which an Audi RS3, Mercedes Benz A45, Golf R will provide, while others will want a Porsche badge in their garage, usually by way of a Cayman or Boxster. 

And just wait until used Alpine’s and Supra’s start entering the used car market.

Buyers simply have too much choice.

Many sellers seem to be trading on the hype, with 90s Japanese cars now playing victim. People are asking obscene amounts of money for average cars all in the name of social media and FOMO.

There is a ceiling for these cars. They aren’t worth more than their original asking price unless they are one of a handful left in the world, in concours condition, original, with all the papers. 

So what about those E36 M3s? Only attrition will see the very best rise above their younger siblings, and at those sorts of prices you’d want to be either a collector or a really big fan.

If you’re willing to pay big money for car, just know that it probably won’t increase in value in the foreseeable future. 

So when you read an advert on a first generation Honda CRX and that states it’s “A classic that’s appreciating in value”, take it with a grain of salt. It may increase 10% in 10 years but you’re absolutely not going to make money in it. There’s simply too much choice.

    1. Ha! For sure Kevin. Written pre-Covid, before the madness ensued. When “classic car” dealers are trying to palm off a trio of Camry’s as classics you just have to throw your hands in the air and admit two things 1) We can speculate but know nothing, really 2) People are desperate…and weird.

  1. Worst write up I’ve heard on the subject personally.
    The proliferation of the m cars is the reason the E36 is commanding more as you wrote the article. These new gen after e36 and to a lesser degree the e46 are too detached from the road. Not raw not nearly as fun or unique.
    I see 10 m cars a day on a short drive in Seattle.
    E36 M3? Just mine 😉
    And it runs perfect still.
    It’s because it’s simple and the styling is timeless.
    The e46 m3 won’t age as gracefully in my opinion.

    1. If I may interpret your comment, what you’re saying is the E36 will retain its value due to the fact it’s a more analog car. I’d agree with that. Taking nothing away from the E36 however, most would argue the E46 is the high point in M3s, striking a balance between modern performance and analog feel. The point I’m making here is it won’t rise in value near to its original asking price, not until attrition takes its toll and/or people start clamouring for that analog feel at all costs and that could take a long time. Glad you’re enjoying your E36 though, hang onto it!

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