NEW YORK, NY.-
For one Monday in early December, the New York Stock Exchange played the role of vintage car museum. At one end of Broad Street, outside the exchange, sat a high-roofed and stately 1921 Duesenberg coupe. At the other, a fearsome 1966 Ford GT40 race car. Between them, encased in a glass vitrine, was an imperturbably cheery 1967 Porsche 911S.
Shaking hands by the coffee stand was McKeel Hagerty. The CEO of the classic car insurance company that bears his name, Hagerty was there to ring the opening bell, and celebrate the first day of trading for his newly public company (HGTY). Later, at a brunch in the Big Boards boardroom, Hagerty wielded a ceremonial gavel and said, This is only just the beginning.
The origins of Hagerty, the company, are far humbler. It was founded by his parents, Frank and Louise, in 1984, in their basement in Traverse City, Michigan, as a boutique insurer of wooden boats.
In the early 1990s, the company began insuring collectible cars. With Hagerty at the helm, it has become one of the largest indemnifiers of vintage vehicles, with more than 2 million classics on its rolls. The actuarial data necessary to determine repair and replacement costs on these cars has also made it a foremost authority on their valuation. Click here
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In recent years, Hagerty has greatly expanded its mission. It has ventured into the editorial realm, releasing boundless automotive coverage on Hagerty.com, as well as YouTube, where it has 1.75 million subscribers. It publishes a monthly car magazine, Hagerty Drivers Club, sent to 1.2 million readers, as well as a semiregular lifestyle publication, Radius, distributed to its top collectors. It purchased Drive Share, a peer-to-peer classic car rental platform, like Airbnb for vintage vehicles.
It opened a half-dozen vintage car storage and lounge spaces, Garage + Social, around North America where members can gather, and preserve their cars. It acquired the rights to major concours delegance for aficionados to show off their collector cars in Amelia Island, Florida, Detroit and Greenwich, Connecticut.
And through its nonprofit Hagerty Drivers Foundation, the company organizes events to promote the collector-car hobby. In collaboration with the Interior Department, the foundation also nominates additions to the National Historic Vehicle Register a designation for notable cars in American history and culture, akin to the National Register of Historic Places.
Hagerty went public via a SPAC, or special-purpose acquisition company, raising roughly $265 million in the process with a goal of expanding. So, what are Hagertys ambitions now? And why did it need to become a publicly traded company in order to achieve them?
The purpose of the company is to save driving and car culture, Hagerty said flatly, as we piloted a zippy, Hagerty-insured 1972 BMW 2002 tii toward the tip of lower Manhattan. If were going to save car culture, we have to make investments outside of 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: That would have been tough for us to afford just as a private company.
The market now values Hagerty at roughly $3.1 billion. And the scale of its proliferating ecosystem has raised some suspicion in the hobby. Someone said to me, We hope they dont Hagertize everything, said Ken Gross, a veteran automotive writer, top-tier concours judge and museum curator.
This apprehension revolves mainly around homogenization: People are concerned that theres a danger that they may all become alike. Looking at economies of scale, and business efficiencies and such, Gross said. Something that had been run by enthusiasts now being run by a company beholden to shareholders.
The Hagerty family retains 52% of the business, but Hagerty accepts this criticism. I think thats fair, given that the fun car world has never had a bigger brand. And were doing a lot of stuff, he said, feathering the BMWs gas pedal to prevent a stall as we idled on Canal Street. I cant get angry about people doubting us. We just have to show up and say, come and experience it for yourself, and I bet youll like it better than you expected.
Hagertys goal is to maintain the unique character of these events, the fun, the playfulness, the twinkle in the eye while upgrading the administrative side like digitizing ticket and concession sales and enhancing the sponsorship experience. He also spoke passionately about the need to compel younger collectors.
Hagerty already tried this at its first running of the Greenwich Concours, in 2021. It included a Concours dLeMons, which featured vehicles from the nadir of the auto industry, from the mid-70s to mid-80s. It incorporated a RADwood event, featuring cars of the 80s and 90s. And were going to add kids programs to all of the events at a much higher level, Hagerty said.
Invigorating younger generations is particularly important: In order to maintain interest in old cars, new enthusiasts must supplement the aging population that has long constituted the hobbys core. Such a shift is already underway. The last two years were interesting years, because for the first time, more than 50% of our new customers were born after 1965, so Gen X-ers and millennials, Hagerty said, as we turned south on Broadway.
Hagerty discussed toppling barriers like removing velvet ropes from around cars at concours and letting young children get in and honk the horn. He called for more regular youth programming. He championed a much friendlier attitude toward video games as an on-ramp for initial engagement. And he discussed expanding the national workshops that Hagerty already hosts: to expose young people to old cars, to teach them to drive a manual transmission, and to provide scholarships for drivers education.
He even has plans for the not-so-distant future, when gasoline-powered vehicles may (and perhaps should) be more anomalous. Im a fan of some of these thoughtful electric conversions of classic cars. And if the only reason some next-generation classic car owner will buy a car is if it has an electric drivetrain, my view is, Great, he said as we approached the stock exchange again. So, I could see us exploring that very deeply, and figuring out, are there partnerships to be had, and what we should do to be a bigger player in that space.
As we completed our drive and discussion, he reiterated his mission to save driving. But he explained that this mantra was not meant as a combative slogan for facing down incursions like congestion pricing, or driverless cars. Im not envisioning us as some kind of NRA of the car world, he said. I like the love and joy and fun of the automobile. Im not about, Fight us for this right. That may be for someone else. But thats not my jam.
Outside experts agreed with this assessment of Hagertys vocation. They encourage driving. Their tag lines all the time are, Drive your cars, Gross said. In some ways, you think, thats a little strange for an insurance company. You think theyd want you to drive as little as possible to minimize the risk. He laughed.
Hagerty said he sincerely wants to help people find the pleasure in the experiential sides of the automobile, those organized around adventure, preservation, culture and legacy. I think that if we can help steward along the reasons that people drive and love cars, other than to get from Point A to Point B, then we win.
Gross concurred with this plan. I dont know how many companies there are that take the long way around. And thats what Hagerty is doing here. Theyre not only selling insurance. Theyre trying to make sure that the reason you need that insurance is viable and fun, and lots of people are doing it, he said. As a business strategy, its pretty smart.
This article originally appeared in The New York Times