A giant of vintage cars with a noble mission: to save automotive culture
During a Monday in early December, the New York Stock Exchange acted as a museum of vintage cars.
At one end of Broad Street, outside the exchange, was a 1921 Duesenberg coupe with a tall, stately roof. On the other, a fearsome 1966 Ford GT40 race car. Between them, locked in a glass case, was an unabashedly cheerful 1967 Porsche 911S.
McKeel Hagerty shook hands near the coffee stand. The CEO of the auto insurance company that bears his name, Hagerty was there to ring the opening bell and celebrate the first day of trading for his new public company. Later, at a brunch in the Big Board boardroom, Hagerty waved a ceremonial hammer and said, “This is just the start.”
The origins of Hagerty, the company, are much more modest. It was founded by his parents, Frank and Louise, in 1984, in their basement in Traverse City, Michigan, as a boutique wooden boat insurer.
In the early 1990s, the company began to insure vintage cars. With Hagerty at the helm, he grew to become one of the largest classic vehicle indemnifiers, with over 2 million classics to his name. The actuarial data needed to determine the repair and replacement costs of these cars has also made it a leading authority on their valuation.
In recent years, Hagerty has significantly broadened its mission. He ventured into the editorial realm, posting unlimited auto coverage on Hagerty.com, as well as YouTube, where he has 1.75 million subscribers. He publishes a monthly automotive magazine, Hagerty Driver’s Club, sent to 1.2 million readers, as well as a semi-regular lifestyle publication, Radius, distributed to its best collectors. He bought Drive Share, a platform for renting vintage cars between individuals, like Airbnb for old vehicles.
It has opened half a dozen vintage car storage and show spaces, Garage + Social, in North America where members can congregate and preserve their cars. It acquired the rights to the Grand Concours d’Elegance allowing enthusiasts to show off their vintage cars in Amelia Island, Florida, Detroit and Greenwich, Connecticut.
And through its non-profit Hagerty Driver’s Foundation, the company hosts events to promote the classic car hobby. In conjunction with the Home Office, the foundation is also proposing Additions to the National Register of Historic Vehicles, a designation for Notable Cars in American History and Culture, similar to the National Register of Historic Places.
Hagerty went public through a SPAC, or special purpose acquisition company, raising around $ 265 million in the process in an effort to grow. So what are Hagerty’s ambitions now? And why did it need to become a publicly traded company to reach them?
âThe company’s goal is to save driving and car culture,â said Hagerty, as we drove a 1972 BMW 2002 tii owned by Hagerty to the tip of lower Manhattan. âIf we want to save automotive culture, we have to invest outside the core business and really help create a whole ecosystem. Achieving this lofty goal required hundreds of millions of dollars in additional investment, he said, âIt would have been difficult for us to afford just as a private company.
The market values ââHagerty at around $ 3.1 billion. And the scale of its proliferating ecosystem has raised suspicion in the hobby. “Someone said to me, ‘We hope they don’t hate everything,'” said Ken Gross, a veteran automotive writer, top show judge and museum curator.
This apprehension revolves mainly around homogenization: âPeople fear that there is a danger that they will all look alike. Looking at economies of scale, business efficiency and the like, âGross said. âSomething that had been run by enthusiasts and is now run by a company accountable to shareholders. “
The Hagerty family retains 52% of the business, but Hagerty accepts this criticism. âI think that’s fair considering the world of fun cars has never had a bigger brand. And we do a lot of things, âhe said, pressing the BMW accelerator pedal to avoid a stall as we idled on Canal Street. âI can’t get mad at people who doubt us. We just have to introduce ourselves and say, come and experience it for yourself, and I bet you will like it better than you expected.
It is especially important to reinvigorate the younger generations: in order to maintain interest in vintage cars, new enthusiasts must complement the aging population that has long been the core of the hobby. Such a change is already underway. The last two years âhave been interesting years because for the first time over 50% of our new customers were born after 1965, so Gen X and Millennials,â Hagerty said.
Hagerty discussed knocking down barriers – like removing velor ropes around cars in competitions and letting young children come in and honk their horns. He called for more regular youth programming. He championed “a much friendlier attitude towards video games” as a ramp for the initial engagement. And he mentioned the expansion of national workshops that Hagerty is already organizing: to expose young people to old cars, teach them to drive a manual transmission and offer scholarships for driver training.
He even has plans for the not-so-distant future, when gasoline-powered vehicles could (and perhaps should) be more abnormal.
âI’m a fan of some of those thoughtful electric conversions of classic cars. And if the only reason a next-gen classic car owner will buy a car is if it has an electric transmission, my take is “Great,” he said as we approached. new from the stock market. “So I could see us exploring this very deeply and determining if there were any partnerships to be had and what we should be doing to be a bigger player in this space.”
As we finished our drive and our discussion, he reiterated his mission to âsave drivingâ. But he explained that this mantra was not intended as a combative slogan to deal with inroads like congestion pricing or driverless cars. âI don’t see us as some kind of NRA of the automotive world,â he said. âI love the love, the joy and the pleasure of the automobile. I’m not sure, âFight us for this right. Maybe it’s for someone else. But it’s not my jam.
Outside experts have endorsed this assessment of Hagerty’s vocation. âThey encourage driving. Their slogans are all the time, “Drive your cars,” Gross said. âIn some ways, you think, it’s a bit strange for an insurance company. You think they want you to drive as little as possible to minimize the risk. He’s laughing.
Hagerty said he sincerely wanted to help people find pleasure in the “experiential sides” of the automobile, those organized around adventure, preservation, culture and heritage. “I think if we can help understand the reasons people drive and love cars, other than getting from point A to point B, then we win.”
Gross agreed with this plan. âI don’t know how many companies are doing the rounds. And that’s what Hagerty is doing here. They don’t just sell insurance. They are trying to make sure that the reason you need this insurance is viable and fun, and a lot of people are doing it, âhe said. âAs a business strategy, it’s pretty smart. “