Are Price Hikes on Classic Vehicles Justifiable?
Heritage has previously discussed the potential of a discrepancy between enthusiasts and classic car auctions/investors. A lot of enthusiasts have cited how investors can hike up prices of beloved classics to then take them off the road to wait for an opportunity to maximise their return on investment.
A Triumph Herald’s Uncertain Future
This surely cannot be the case for all investors and so we’ll examine the line between honest trade and opportunist price hiking. The scenario used to illustrate these points is one of a 1967 Triumph Herald which was recently sold at auction for £3,710. This is a very good price for such a pretty British classic but even so it was somewhat of a shock to see the very same vehicle advertised on Ebay days later for £7, 995.
It is a shame to see this as vehicles such as the 1967 Herald may struggle to sell after having its asking price doubled since being sold at auction. What is destined for the Herald now? One possibility is that it may sit in a showroom or storage waiting years to finally be sold. Alternatively in the hands of an enthusiast this car would receive regular use as well as being enjoyed by potential club members and the public.
Price Hiking Vs True Value
On the other hand, the £7, 995 figure may be more of an appropriate price for this vehicle and that the person who purchased this Herald had the correct knowledge at the right time to spot a great deal. When surveying the market by using resources such as; Classic Car Weekly, Cars and Classic, Classic Cars for Sale and other valuation applications you can see that if in top class condition the vehicle may actually be worth the new asking price.
The second step was then to assess what condition the Herald looked to be in. A good start was to compare it to other Heralds being sold on the market which were categorised as concourse. Everything has to be taken with a generous pinch of salt as we can only use images from the internet as opposed to being able to assess the vehicle in front of us. Everything appeared to be in shape, from the Herald’s beaming interior to the shining chrome bumpers so it was safe to assume the vehicle was somewhere between an excellent and concourse condition.
Right or Wrong?
Considering everything we’ve examined we can draw to a conclusion that this Herald was purchased at a price that probably didn’t reflect its true value. As a result, the person who purchased this vehicle took the opportunity to rethink and adjust the price in accordance with the vehicle’s condition and actual value. The Herald’s new owner must have had an expert level of knowledge to be able to recognise such as golden opportunity especially given the quick fire nature of auction houses. As for the Herald’s future we hope that it won’t be too long before its back in the hands of an enthusiast.
This is was just one scenario which appears to be a showcase of honest classic car trading. There are countless other cases where vehicles have been purchased to then receive unethical levels of price increases. In the future it will be interesting to see how investors react to news of decreasing values and if it forces them to sell classics at a more appropriate price or if they sit on exaggerated values waiting for the previously mentioned maximised return on investment.
Have you witnessed anything similar? Are there any specified vehicles you worry may be taken away from enthusiasts due to fluctuating values? If so we invite you to share your stories and opinions on this topic. If you’d like to join the debate leave a comment on any of our social media posts with your thoughts.
There is also another of our articles here which covers the current state of the classic car market: https://www.heritagecarinsurance.co.uk/newsroom/news-and-articles/values-classic-cars-declining/