Cars are cool, simply ask an auto enthusiast from any generation. People have been nerding out about how they look, how they’re constructed, and what’s under the hood since the first “horseless carriage” hit the scene in 1886. What started as a revolutionary mode of transport has grown into a global culture that represents personality and style. And along with that growing societal influence, we have witnessed the development and growth of the enthusiast subculture for whom automobiles are an enduring passion. As someone with decades in the auto industry, I've seen the economy and interests around cars shift, but automotive enthusiasts’ passion remains undiminished.
Cars have been at the forefront of innovation for more than 100 years. From the modest origins of the Ford Model T, the transformation of the automobile and the enthusiast—who lives, breathes, and dreams cars—has been incredible. Every era births its own kind of car enthusiast, and now, as we dive into the electric age, the definition of an "enthusiast" is expanding. It's not just about classics anymore; today's passion covers a much broader spectrum—and the interest isn’t just relegated to vintage or niche vehicles.
In the 1950s we saw the automobile become intrinsically linked with pop culture; as a child, I was captivated by George Lucas’ "American Graffiti," where Harrison Ford's character raced a hot rod Chevy and Suzanne Somers appeared as the enigmatic blonde in a '56 T-bird. While they were prominent figures, the cars they drove became iconic. Fast forward to the early 2000s, and the high-octane thrills of the late Paul Walker's orange ‘94 Toyota Supra in “Fast & Furious”, where street racing evolved from a fringe interest to a cultural phenomenon. The understated charm and rebel spirit of a bygone era presented in "American Graffiti" starkly contrasts with the adrenaline-fueled, flashy world depicted in more recent films. Yet, both capture the essence of their times, showcasing the timeless allure of cars and the undeniable urge to push their limits on the open road.
Today, the rise of Tesla, Lucid, and other direct-to-consumer EV brands has carved out a new category of car aficionados. For the first time in automotive history, an electric vehicle (EV) topped U.S. sales charts and EV sales have captured a significant chunk of the market, rising from just 4% in 2020 to 18% in 2023. In Q1 of 2023, Tesla's Model Y surpassed traditional bestsellers like the Toyota Corolla. This surge in sales underscores the growing excitement surrounding EVs.
A quick YouTube search will show you Tesla Plaid models going head-to-head with Dodge Hellcats, a testament to the merging of these automotive realms. For these enthusiasts, performance, innovation, and a commitment to a sustainable future are all status symbols. The recent success of Tesla's Model Y—outselling long-time favorites—is a testament to this cultural shift.
The collector car market is sizable with a $105+B share of the market. A research report from the Specialty Equipment Market Association (SEMA) reveals that an average of $52 billion is spent annually on car modifications and accessories. This passion for cars is celebrated in music, film, and local events that highlight the “Tuner” culture—such as Oakland, CA’s First Fridays known for its informal showcase of modified cars for enhanced aesthetics and performance.
Vintage charm, hello Land Cruiser FJ and Ford Bronco, and unique car models from the Mazda Miata to luxury brands like Pagani, have also amplified digital platforms. Mecum brought in a record $675M in revenue by moving part of their auction business to the digital sphere while Bring a Trailer (BAT) reported $1.3B in sales in 2022. Moreover, Endeavor IMG acquired a 55% stake in Barrett Jackson for $261.25M that same year making one thing clear: Car culture for the auto enthusiast isn't just about driving—it's about feeling, living, and breathing cars—and data clearly shows that people are willing to pay for those pleasures.
If one thing is made clear by the numbers, it’s that the auto enthusiast segment is booming. While investments such as 401Ks are primarily guided by a logical buy-low-sell-high approach, investments in vehicles are uniquely influenced by both logic and emotion. Let's face it—there are likely better investments to consider than a 1965 Mustang or a 1981 DeLorean, but both vehicles offer the enthusiast critical social and emotional cachet.
That said, while it's true that many cars depreciate, certain models appreciate or hold their value better than others. Regardless of the balance of rational and emotional sway in decision-making, enthusiasts are keen on this information. Yet, many vehicle appraisal tools, often geared toward lead generation, can distort or restrict such data. For example, industry giant Kelley Blue Book (KBB) provides as many as 4 valuations including Retail, Trade-in, Private Party, and Cash Offers, with figures varying by thousands of dollars.
Today's consumers manage their assets digitally—tracking home values with tools like Zillow and Redfin, overseeing stocks with apps like Robinhood, and comparing insurance on various platforms. Similarly, auto enthusiasts yearn for convenient digital tools to finance, track, and understand their automotive investments, regardless of their specific automotive interests.
The automotive landscape for enthusiasts is shifting and evolving as much as the vehicles themselves, with the economy expanding in some areas to support them, while facing resistance in others. Various states are introducing legislation to curtail direct-to-consumer sales by companies like Rivian and Lucid, aiming to protect traditional dealership models. Securing financing for specialty cars, high-end vehicles, and even EV-related software is challenging, given the limited number of innovative consumer-direct financing platforms. Remarkably, about 80% of the $1.5 trillion auto debt market is tied to the dealership model, restricting consumers' access to novel solutions.
But some solutions—and opportunities—do exist. Specialty insurance provider Hagerty has collaborated with Broad Arrow Capital to cater to luxury and exotic car collectors. Carputty, the fintech company I co-founded in 2020, offers a direct-to-consumer credit line that enables consumers to purchase, refinance, buy out existing leases, and track the historical and future values of multiple vehicles with a dashboard similar to a Schwab money market account.
In the rental sphere, disruptors like Turo are also transforming the enthusiast experience. Borrowing the Airbnb model, Turo allows individuals to rent unique cars, bridging the gap between enthusiasts and the vehicles they dream about. Even large global rental companies like Hertz now offer what they brand as their "Dream Collection," which is analogous to the big hotel chains getting into the vacation home rental space. Auto enthusiasts can now drive a Nissan GT-R (nicknamed Godzilla) or Porsche 911 Targa while traveling for business.
The automotive industry, much like its consumers, has never been static. With each decade, new trends emerge, reflecting the cultural zeitgeist and technological advancements of the era. The market's trajectory is clear: It's heading towards diversification and the development of new niches within the auto sector. A prime example is the popularity and skyrocketing values of what's called "restomods" in the EV niche. These are older classic cars modified with modern technology for performance and safety. Any enthusiast will tell you that this used to be considered blasphemy but now it's becoming more and more mainstream.
One way to gauge the diversification of automotive interests is by examining the online community's engagement. For example, “1-in-3 people occasionally share automotive content or opinions via social channels,” according to Hearst Autos. There's also an increasing number of subreddits dedicated to various car niches, from the classic muscle car communities to those centered around maximizing mileage on a Prius. This suggests a broadening in the types of cars that enthusiasts are gravitating towards.
As we look ahead, the auto enthusiast's persona will only diversify further. Will we see a rise in Hydrogen vehicle enthusiasts? It's plausible. Today's enthusiast isn't just a gearhead, a classic car aficionado, or a celebrity like Jay Leno or Jerry Seinfeld boasting a multi-million dollar car collection. The realm of auto enthusiasm has expanded to include anyone passionate about their vehicle, looking for means to finance, enhance, or showcase it—be it in their community or on digital platforms. In fact, the modern enthusiast is redefining car culture, spanning a vast spectrum of interests, locations, and financial backgrounds, united by a shared passion. Their resilience makes this segment of the auto industry particularly robust against macroeconomic fluctuations and shields this subset from swings in the broader economic climate, which can often be harmful to conventional retail.
Times and preferences may change, but car culture is as robust today as it ever was, with contemporary music—like Lloyd Banks’, “Beamer, Benz, or Bentley” or Rick Ross’ “Aston Martin Music”—celebrating auto enthusiasm and echoing the American muscle car fervor of the late 1960s when hot rods ruled the streets and every teenager dreamed of a rite of passage behind the wheel. Vehicles and technologies will continue to transform, and the industries supporting this passion are poised for tremendous growth. No matter how tastes evolve, the sheer love and enthusiasm for automobiles remain undiminished. As we cruise forward, fueled by nostalgia for drag races and diners, it's this enduring passion that steers the economy of automotive enthusiasts toward the horizon and what promises to be a bright future.
