Classic Car Auctions & Wider Trends
On the last weekend in July Silverstone Auctions held their flagship sale – the Silverstone Classic which gave us one of the best barometers of the current state of the market. With the inclusion of two large collections it was bumper auction with 226 lots consisting of cars, automobilia and registrations.
Whilst one auction doesn’t dictate the market we were looking forward to the see how various key lots performed. We witnessed some strong bidding which ultimately resulted in it being Silverstone Auctions’ biggest ever sale, grossing £15.8 million with a 77% sale rate.
The headline lot was a 1972 Lamborghini Miura SV which sold for £1,912,500 but there were plenty of other results that also raised an eyebrow. Early on during the first day a Subaru Impreza 22B-STI sold for £130,500 which we believe may be the highest result in the UK for a Subaru without racing provenance. As an indication of how far 22B values have climbed Silverstone Auctions sold one in 2016 for £73,125.
Whilst the values were consistently strong we did think that the 2017 Jaguar F-Type SVR with 2,720 miles on the clock was a good buy at £62,000 – a saving of £53,821 off the invoice price (that’s almost £20 per mile in depreciation alone). Also worth a mention was lot 333 was a 1992 Jaguar XJ220 which at £210,000 looked like a good buy against values in the range of £350,000 – £400,000 we were seeing only last year and it was a similar story for lot 386, a 1980 Ferrari 512 BB (chassis 29271) which sold for £187,000 – the very same car that we saw retail in 2016 for £330,000
Also a discussion point in the office was lot 505, a 1992 Mercedes-Benz 190E 2.5-16 Evolution II. It sold for £180,000 and in 2015 Silverstone Auctions sold one with a similar level of mileage for £100,688. We think that both the Subaru and the Mercedes-Benz lots are a good indications of where the market is heading in the medium to long term; those who had these 90s motoring icons as posters in their bedroom walls are now in a position to own them. We’ve been predicting this for a few years now, and it seems as though their buying power is starting to take effect.
Before the sale we were entertaining the possibility that it could be a flop against a backdrop of financial uncertainty. We clearly weren’t the only ones who thought this and had acted on requests to put in place finance for a number of clients prior to the sale so that they were in a position to take advantage of the anticipated value on offer. However, the bidding was strong and the bargains were nowhere to be seen.
This is a surprisingly pattern that we are seeing repeated in the current market. After two quarters of economic decline were are now officially in our first recession since 2009, average earnings have fallen in real terms for the first time since records began in 2001 and there have been over 700,000 job losses which will no doubt rise as the support for the 9.6 million workers currently on government furlough ends in November. Despite this, the auction houses and online platforms are reporting consistently strong results and we’re not entirely sure what the driving force behind it is.
Some of the theories that we are working with are;
Storing of Wealth
With interest rates at historic lows and financial markets in a state of flux merely keeping up with inflation is a challenge. For those with cash reserves and storage space it could be appealing to instead put their money into something from which they can gain some enjoyment and hopefully keep up with inflation.
Pent Up Demand
During lockdown there were limited opportunities to buy and sell vehicles, and we may be seeing some of this pent up demand unwind in light of the ability to move more freely.
In light of the ongoing pandemic we have spoken to some clients who have decided now is the time to purchase the car that they’ve always promised themselves. Those we have spoken to can’t be alone and we think this may be a common occurrence playing out through the market.
Whatever the true reasons may be it is fantastic to see the market in such fine fettle and we look forward to seeing how it develops in the coming months.