Are the values of classic cars declining?

The topic of value and the strength of the classic market is always a subject which attracts debate, but now it could be claimed to be particularly important as the market has been experiencing some turbulence. The magnitude of these changes are a point of dispute at the moment with some claiming that the “classic car bubble” is about to burst and others disregarding these claims as fear mongering.

Over the last ten years classic cars have provided a strong investment but some media outlets are reporting drops in value of up to 10%. Data provided by the Coutts Passion Index, an organisation which records market trends of expensive collectibles showcase a bleak overview. According to Coutts and other research on this topic the classic car market has entered somewhat of a recession where the market has declined for two years consecutively. No market has been hit harder than the “Investment” cars market – classic car prices over £250,000 have in many cases dropped back in price by 10-20% and more, with modern collector cars such as the Ferrari 458 Speciale and LaFerrari going off the boil.

There is much talk of “under the radar” deals in the industry – we have certainly seen some evidence of this, but whether this is  simply a distraction remains to be seen. If collectors are asking dealers to sell their cars under the radar, it begs the question “Why now?”

 

ENTHUSIAST’S RESPONSES 

In response, enthusiasts have begun to formulate opinions which outline more specific segments of the market which have been affected. There are suggestions that the top and the lower end of classic car values are growing further apart and the market is not crashing but merely cooling off. This creates a haven for the investors of expensive cars but also an opportunity for grassroots enthusiasts looking to purchase a more affordable classic. To gain more of an insight into this topic we spoke to enthusiasts attending the NEC Practical Classics and Restoration Show and asked them for their thoughts:

 

MG B Owner:

  • Disregarded classic car investors as having: “more money than sense”
  • Commented on how classic car auctions can be elitist and unrepresentative of real enthusiasts
  • Questioned the validity of the data used in recent headlines as they may not take into account private buyers and sellers

 

Mazda MX-5 Owner:

  • Overall wasn’t too phased by the recent headlines
  • Told us that the return he gets from his car is the enjoyment of driving not the monetary gain
  • Did extend his fears to specific cars
  • Quoted the Daimler Dart as a vehicle whose recent price hikes may take it away from true enthusiasts who can drive and properly maintain the vehicle

 

MG T-Type Owner:

  • Also had an unfavourable view of investors and looked down on anyone who didn’t drive and use their classics.
  • Frustrated by investors and blamed them for hiking up prices especially when they never actually use the vehicles.
  • Also chooses to avoid classic car auctions

 

Some interesting points were brought to attention, specifically the questioning of the validity of data used in recent headlines. When inspected a little further the research on the market only focuses on the top end of the classic car market which include classic car auctions selling expensive vehicles like Aston Martins, E-Types and Ferraris. Using data from expensive cars sold at auction presents a very narrow insight into the market which fails to represent affordable classics, modern classics, vintage vehicles and private sellers.

Finally, it’s also very important to return to the point that the Mazda owner brought up which was to enjoy your classic. If you begin to dwell on the topic of value too much you may begin to forget the real joys of owning a classic whether it’s the heritage of the vehicles or the comradeship of other enthusiasts, not just the fiscal return.

Interested in classic car valuations? Take a look at our popular article from last year on the top ten classic cars under £5000. Do you think these cars have held their value through to this year?

 

Insure Your Classic Car With Heritage 

The best rates on classic car insurance are available from Heritage Car Insurance. We value the car fairly as well as the driver behind the wheel. We also offer insurance on vintage cars. Get a personalised quote online or call us today on 0121 248 9229.

 

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