Selling your classic car? It's FREE to list your car on Honest John Classics | No thanks

Opinion: Are classic car prices heading for a crash?

Published 22 August 2014

The last few years have seen major increases in classic car values, with vehicles selling for the kind of money that would have seemed unthinkable even just a decade ago. And while many of the headline-grabbing sale prices have been via the most presigious auction houses, with rare Ferraris, Aston Martins and so on changing hands for eye-watering sums, the market as a whole has seen an upward shift in values.

This leads to one obvious question, however: is the classic car market that’s been booming in recent years inevitably heading for a fall? After all, the classic car boom times of the late ’80s turned to ‘bust’ in the early ’90s, as many of the most expensive cars suddenly saw their values plummeting. Could the same be about to happen?

In many ways today’s situation is different. According to several classic car auctioneers we’ve spoken to, buyers aren’t relying on loans – unlike in the late ’80s, when ‘premium’ classics were usually acquired via borrowed money. And when interest rates soared, a glut of cars coming back on the market sent values into a downward spiral.

These days, ultra-low bank rates are encouraging enthusiasts and investors to spend their own money on cars, giving them an enjoyable asset that may continue to rise in value rather than them simply relying on 1-2% interest from their bank, 'People are taking money out of the bank and putting it into genuinely usable classics,' auctioneer Richard Edmonds told us. 'The market is very strong.'

The classic car scene is also attracting a large number of newcomers, which means more people looking for cars and helping to keep demand high – even though many of them only want the best-condition examples:'The market of 2014 is certainly bullish but is also more focused than before, with increased demand for high-quality cars in every sector,' said Edward Bridger-Stille, auction director of Historics at Brooklands.

As for which models are selling particularly strongly, David Mathewson (from Yorkshire-based Mathewsons) tells us that 'traditional sports cars like MGBs, TR6s and so on are in demand', whilst Richard Binnersley (joint managing director of Brightwells) reckons there’s a real 'surge in demand for Mercedes SLs and early Porsche 911 Turbos, as well as anything original from the late ’60s or early ’70s.

Nobody we spoke to saw any real cause for alarm in terms of a possible collapse in demand and prices, with confidence remaining high across the entire market. And for anybody owning a classic car or working within the industry, this has to be excellent news.

Comments

Classic & Sports Finance    on 22 August 2014

The general sentiment in this is about right but the facts are a little sketchy.

"According to several classic car auctioneers we’ve spoken to, buyers aren’t relying on loans" - there are a lot of people financing classic cars at the moment. Demand for classic car finance is at an all time high.

"The classic car scene is also attracting a large number of newcomers, which means more people looking for cars and helping to keep demand high" - This is true, but it's also attracting investors and speculators into the market. When they lose interest, then owners and sellers need to be cautious.

The market is strong but probably needs to cool down a bit. Asking sellers and auctioneers, who are reliant on the strong market for their profits, is a bit like asking a shark if it's safe to swim....

This is great news for those working in the industry (like us) but we urge car buyers to remember that it is still possible to pay sensible prices for quality classics without the need to pay over the odds at auction or through over-priced dealers.

Add a comment

 

Ask Honest John