The Car Market – Post COVID

Last August, amidst the uncertainty of COVID-19, we gave our take on the market using the results of the recently completed Silverstone Auctions Classic sale as a guide. A year on, what has changed in the car market – Post COVID?

We were surprised last year at the strength of the sales prices achieved, having half expected a collapse in values amid the potential turmoil. It didn’t happen and we are glad to say that this is still the case a year on. We have had dialogue with our panel of lenders who have reported that the level of bad debt over the past year has surprisingly been in line with a typical year, which would suggest that those buyers who did wish to end their agreements were able to do so without having to resort to a fire sale of some kind.

The pent up demand that we felt was present in the market last year has by now run its course. The only caveat to this is the well reported semiconductor shortage, however, once supply chains return to their pre-pandemic norms how will this impact specialist new car sales and availability? Limited supply means that the latest GT3 iteration in the shape of the 992 currently has asking prices that are more than double the stated list price of £123,100. Is this due to a decision to engineer exclusivity of the new model, or because limitations mean that Porsche have to limit supply?

The GT3 is a car that we are seeing a lot of at the moment within the office. Last year we also said that we thought there was a degree of people simply buying something to enjoy, and we think that this rationale is behind the continuing popularity amongst our clients of the 997 GT3 which has been a popular choice of late.

Not only is it possibly the ultimate track day toy, but it also offers good residual value. Current asking prices of 997 GT3’s are around £75,000, about the same as a new one cost 14 years ago (albeit when adjusted for inflation that retail price in today’s money is about £113,000).

The strong sales results for mid 90’s cars that we referenced last August has continued with some record-breaking numbers for the modern classic sector both at home and abroad in recent weeks, however, we have seen a diminished level of demand within the classic side of the market. We haven’t had many enquiries for our typical bread and butter, think six-cylinder Aston Martins and E-Types, and we’re seeing that some pre-war stock is taking a little longer than normal to find new homes.

Whilst we haven’t seen a lot of spectaular activity, those who were brave and bought cars for the right reasons, amid the uncertainty last year, have been on the whole, rewarded. The Jaguar XJ 220 sold in the Silverstone sale, which we referenced in our update last year as being a good buy at just over £200,000, looks good value in today’s market.

In July 2020 we wrote an article about the Porsche 996 GT3 market waking up, which you can read it here!