Classic Car Values 2021 and Beyond

Classic Car Values 2021 and Beyond
15th July 2021 Ed Barton-Hilton
Classic car values 2021 and beyond, for example the Aston Martin DB4 GT Zagato.

Classic Car Values 2021 and Beyond

Classic Car Values 2021 and Beyond

Have we reached the peak?

Not that many years ago, if you were asked at a dinner party what your hobbies or interests were and your response was “classic cars”, you would ordinarily get a nod of acknowledgement and then a turn of the head as they seek someone more interesting to talk to. An interest in old cars was reserved for the oily old boys who had dirt under their fingernails and spent Saturday nights filing down their ignition points. This was not a cool thing to do in the eyes of the masses.

Let us remember, the car industry is a young market with only a little over 100 years of trading history. When a classic is regarded as anything over 40 years old, we only have 60 odd years’ worth of collectable cars – compare that to art. The first cars to be collected and cosseted are regarded as pre-war cars, generally acquired by those who remember them from their childhoods. This trend continues today, as most will chase their hero or poster cars form their childhoods.

The ‘golden era’ of collectability and of values has for a long time been cars of the 1950s and 60s. Cars of this period had become standardised in form – no centre throttles, ignition and advance hand controls or double declutching so anyone is capable of driving them. They also became highly useable – fast, comfortable and achingly beautiful. This era of car was also an ‘old’ car at the boom of the collectable car market in the 1980s. Those who remember these cars from their childhoods had now made enough money in the booming city trade to buy what their father or uncle owned in period.

At that time, classic cars remained a niche pastime, as most preferred other pursuits such as golf, sailing or riding horses. As the money flowed, demand rocketed and new car deliveries became so long that more money was put into classic cars and the subsequent rise in prices followed. Here came the investors and the increase in classic car prices.

 

Fast forward to 2008, recession time. Why keep money in the bank with interest rates so low? Time to dump those paper investments and look at hard assets. Gold is largely safe, as is art if that is your thing. Then your slightly odd colleague across offices tells you old cars go up in value, and the kicker, no capital gains tax on any profits when you sell. An investment you can touch, smell, drive and strut in front of your mates at the pub. It was a no brainer, and the market went into overdrive.

News spread fast and by 2011, classic cars were the number one investment for anyone wanting to make their money work. The majority of buyers had no previous experience or interest in cars and as these specu-investor buyers came thick and fast, the money flowed into the industry. Daily, there was another dealer, auction or event where the new wave of owners could spend their money.

The classic car industry as a whole is worth the same as the entire UK Arts and Creative sectors, or all UK Ports. At the latest count, the annual turnover in the industry is £18.3 billion. Yes billion. And the industry employs 113,000 people, 222% up on 2016. Let’s put that in car terms. One Jaguar E-Type sold for £40,000 in 2011. It has sold in 2021 for £140,000.

All is rosy 10 years on however, those 80s city boys are aging and many have had the enjoyment (and profit) of classic car ownership thus, have moved on (cashed out). So what are the young and newly wealthy acquiring now to build up their ‘portfolios’. They don’t lust after the 50/60s cars as they are not relevant to their generation – their poster cars were Lancia Deltas, 993 Turbos and even Sierra Cosworths. Where does this leave the ‘golden era of motoring’ cars? A stark realisation was felt by the industry when a McLaren F1 sold for £14m. Ten years ago that car was £1m. It won’t be long until the McLaren F1 will knock the king of classics car off its throne, the Ferrari 250 GTO which to today’s youth may resemble a vintage car.

There are more ‘collectable’ cars than there have ever been, and that pool of cars naturally grows each year. Manufacturers are obsessed with special editions to help boost their sales figures as they prey on consumers believing they will flip their GTS-R-XX-Special-DMG-R for a profit. More people than ever seem to have an interest in classic cars too which sustains the supply.

 

At your next dinner party, tell someone you are interested in old cars and hear them say, “oh, I’ve been to Goodwood”. No longer the hobby of the oily enthusiast, cars are now the pastime of choice for any discerning millennial, and in the eye of the wider public a lifestyle product.

What becomes of our beloved 1950s and 1960s sports car, grand tourers and racers? Are these cars no longer relevant to today’s generation? Do they want the latest wizz pop i-car or at least a car their friends will remember? Without question, some will, but many millennials, gen-z and gen y’ers choose to wear a Rolex Daytona over an i-watch, leather handbags over recycled ones, and brogues over sneakers. You get the point – young people aren’t all that bad and do appreciate the finer things. There are few comparisons to make when comparing an i-Watch and a Rolex and the same can be said with modern to classic cars.

Can you imagine a car of today having raced at Le Mans twice, been stored in a barn for 20 years, then restored, used as a family car, exported to a foreign land, restored again and then reimported home? Is there a modern car today as sexy, provocative, or emotive as an E-Type per say? The appeal of 50/60s cars in clear. Pre-war cars may be a harder sell to a younger generation as they are mechanically unfamiliar and were not immortalised in pop culture like post-war cars.

Areas of the market may suffer (those already overinflated) as the money dilutes through the eras of car but it is hard to imagine a time where no one wants to own a DB5. Let us remember, while the collector car market is always growing, this is soon to come to an end as we roll into a new era of motor vehicle. In time it is possible to imagine the veteran/vintage/classic monikers being replaced with petrol/electric/hydrogen. A new era dawns…

First published for Historic Motor Racing News, July 2021